UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended ~~June~~September 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From to

Commission File Number: 000-23189

C.H. ROBINSON WORLDWIDE, INC.

(Exact name of registrant as specified in its charter)

Delaware

41-1883630

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

14701 Charlson Road

Eden Prairie, MN 55347

(Address of principal executive offices, including zip code)

952-937-8500

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.10 par value	CHRW	Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Emerging growth company

☐

Non-accelerated filer

☐

Smaller reporting company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~July 27,~~November 2, 2022, the number of shares outstanding of the registrant’s Common Stock, par value $0.10 per share, was ~~123,883,299.~~117,709,468.

Table of Contents

C.H. ROBINSON WORLDWIDE, INC.

TABLE OF CONTENTS



	PART I. Financial Information

Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of September ~~June~~ 3 0 ,30, 2022, and December 31, 2021	3
	Condensed Consolidated Statements of Operations and Comprehensive Income for the Three and ~~and S~~Nine ix Months Ended ~~Jun~~September e 30,, 2022 and 2021	4
	Condensed Consolidated Statements of Stockholders' Investment for the Three and SNine ~~ix Mon~~t h s Months Ended ~~June~~September 30 , 2022 and 2021	5
	Condensed Consolidated Statements of Cash Flows for the ~~Six~~Nine Months Ended JuSeptember ne 30,, 2022 and 2021	67
	Notes to Condensed Consolidated Financial Statements	78
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3029
Item 4.	Controls and Procedures	3029

	PART II. Other Information

Item 1.	Legal Proceedings	3130
Item 1A.	Risk Factors	3130
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3130
Item 3.	Defaults Up on Senior Securities	3130
Item 4.	Mine Safety Disclosures	3130
Item 5.	Other Information	3130
Item 6.	Exhibits	3231
	Signatures	3332

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

C.H. ROBINSON WORLDWIDE, INC.

Condensed Consolidated Balance Sheets

(unaudited, in thousands, except per share data)


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	238,925	$	257,413	Cash and cash equivalents	$	187,532	$	257,413
Receivables, net of allowance for credit loss of $37,518 and $41,542		4,302,321		3,963,487
Receivables, net of allowance for credit loss of $33,480 and $41,542						Receivables, net of allowance for credit loss of $33,480 and $41,542	3,802,160		3,963,487
Contract assets, net of allowance for credit loss	Contract assets, net of allowance for credit loss	518,752		453,660		Contract assets, net of allowance for credit loss	363,697		453,660
Prepaid expenses and other	Prepaid expenses and other	108,258		129,593		Prepaid expenses and other	79,977		129,593

Total current assets	Total current assets	5,168,256		4,804,153		Total current assets	4,433,366		4,804,153
Property and equipment, net of accumulated depreciation and amortization	Property and equipment, net of accumulated depreciation and amortization	155,829		139,831		Property and equipment, net of accumulated depreciation and amortization	158,706		139,831
Goodwill	Goodwill	1,472,855		1,484,754		Goodwill	1,458,303		1,484,754
Other intangible assets, net of accumulated amortization	Other intangible assets, net of accumulated amortization	75,789		89,606		Other intangible assets, net of accumulated amortization	68,122		89,606
Right-of-use lease assets	Right-of-use lease assets	338,223		292,559		Right-of-use lease assets	349,386		292,559
Deferred tax assets	Deferred tax assets	134,404		124,900		Deferred tax assets	207,452		124,900
Other assets	Other assets	112,083		92,309		Other assets	120,195		92,309
Total assets	Total assets	$	7,457,439	$	7,028,112	Total assets	$	6,795,530	$	7,028,112

LIABILITIES AND STOCKHOLDERS’ INVESTMENT	LIABILITIES AND STOCKHOLDERS’ INVESTMENT					LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	1,872,497	$	1,813,473	Accounts payable	$	1,662,606	$	1,813,473
Outstanding checks	Outstanding checks	54,360		105,828		Outstanding checks	93,163		105,828
Accrued expenses:	Accrued expenses:					Accrued expenses:
Compensation	Compensation	190,428		201,421		Compensation	204,661		201,421
Transportation expense	Transportation expense	405,284		342,778		Transportation expense	280,500		342,778
Income taxes	Income taxes	38,850		100,265		Income taxes	62,912		100,265
Other accrued liabilities	Other accrued liabilities	177,645		171,266		Other accrued liabilities	205,034		171,266
Current lease liabilities	Current lease liabilities	72,686		66,311		Current lease liabilities	71,002		66,311
Current portion of debt	Current portion of debt	674,000		525,000		Current portion of debt	779,000		525,000
Total current liabilities	Total current liabilities	3,485,750		3,326,342		Total current liabilities	3,358,878		3,326,342

Long-term debt	Long-term debt	1,594,055		1,393,649		Long-term debt	1,419,380		1,393,649
Noncurrent lease liabilities	Noncurrent lease liabilities	281,319		241,369		Noncurrent lease liabilities	293,325		241,369
Noncurrent income taxes payable	Noncurrent income taxes payable	26,291		28,390		Noncurrent income taxes payable	26,865		28,390
Deferred tax liabilities	Deferred tax liabilities	16,521		16,113		Deferred tax liabilities	18,041		16,113
Other long-term liabilities	Other long-term liabilities	1,088		315		Other long-term liabilities	1,480		315
Total liabilities	Total liabilities	5,405,024		5,006,178		Total liabilities	5,117,969		5,006,178
Stockholders’ investment:	Stockholders’ investment:					Stockholders’ investment:
Preferred stock, $0.10 par value, 20,000 shares authorized; no shares issued or outstanding	Preferred stock, $0.10 par value, 20,000 shares authorized; no shares issued or outstanding	—		—		Preferred stock, $0.10 par value, 20,000 shares authorized; no shares issued or outstanding	—		—
Common stock, $0.10 par value, 480,000 shares authorized; 179,204 and 179,206 shares issued, 125,116 and 129,186 outstanding		12,512		12,919
Common stock, $0.10 par value, 480,000 shares authorized; 179,204 and 179,206 shares issued, 120,594 and 129,186 outstanding						Common stock, $0.10 par value, 480,000 shares authorized; 179,204 and 179,206 shares issued, 120,594 and 129,186 outstanding	12,059		12,919
Additional paid-in capital	Additional paid-in capital	709,163		673,628		Additional paid-in capital	731,496		673,628
Retained earnings	Retained earnings	5,411,346		4,936,861		Retained earnings	5,567,592		4,936,861
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(87,860)		(61,134)		Accumulated other comprehensive loss	(137,650)		(61,134)
Treasury stock at cost (54,088 and 50,020 shares)		(3,992,746)		(3,540,340)
Treasury stock at cost (58,610 and 50,020 shares)						Treasury stock at cost (58,610 and 50,020 shares)	(4,495,936)		(3,540,340)
Total stockholders’ investment	Total stockholders’ investment	2,052,415		2,021,934		Total stockholders’ investment	1,677,561		2,021,934
Total liabilities and stockholders’ investment	Total liabilities and stockholders’ investment	$	7,457,439	$	7,028,112	Total liabilities and stockholders’ investment	$	6,795,530	$	7,028,112

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

C.H. ROBINSON WORLDWIDE, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income

(unaudited, in thousands except per share data)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Revenues:	Revenues:									Revenues:
Transportation	Transportation	$	6,465,642	$	5,240,448	$	12,993,993	$	9,800,675	Transportation	$	5,724,364	$	5,999,901	$	18,718,357	$	15,800,576
Sourcing	Sourcing	332,833		292,278		620,435		535,920		Sourcing	291,012		263,794		911,447		799,714
Total revenues	Total revenues	6,798,475		5,532,726		13,614,428		10,336,595		Total revenues	6,015,376		6,263,695		19,629,804		16,600,290
Costs and expenses:	Costs and expenses:									Costs and expenses:
Purchased transportation and related services	Purchased transportation and related services	5,466,874		4,519,305		11,117,098		8,400,590		Purchased transportation and related services	4,862,541		5,180,390		15,979,639		13,580,980
Purchased products sourced for resale	Purchased products sourced for resale	299,988		264,245		559,521		484,449		Purchased products sourced for resale	265,641		239,113		825,162		723,562
Personnel expenses	Personnel expenses	444,764		362,901		858,125		723,736		Personnel expenses	437,545		399,880		1,295,670		1,123,616
Other selling, general, and administrative expenses	Other selling, general, and administrative expenses	117,184		125,671		264,545		243,887		Other selling, general, and administrative expenses	162,040		133,543		426,585		377,430
Total costs and expenses	Total costs and expenses	6,328,810		5,272,122		12,799,289		9,852,662		Total costs and expenses	5,727,767		5,952,926		18,527,056		15,805,588
Income from operations	Income from operations	469,665		260,604		815,139		483,933		Income from operations	287,609		310,769		1,102,748		794,702
Interest and other income/expense, net	Interest and other income/expense, net	(27,395)		(13,497)		(41,569)		(24,757)		Interest and other income/expense, net	(15,972)		(16,662)		(57,541)		(41,419)
Income before provision for income taxes	Income before provision for income taxes	442,270		247,107		773,570		459,176		Income before provision for income taxes	271,637		294,107		1,045,207		753,283
Provision for income taxes	Provision for income taxes	94,085		53,318		155,037		92,082		Provision for income taxes	45,839		47,054		200,876		139,136
Net income	Net income	348,185		193,789		618,533		367,094		Net income	225,798		247,053		844,331		614,147
Other comprehensive loss, net of tax		(33,596)		(162)		(26,726)		(7,448)
Other comprehensive loss										Other comprehensive loss	(49,790)		(12,034)		(76,516)		(19,482)
Comprehensive income	Comprehensive income	$	314,589	$	193,627	$	591,807	$	359,646	Comprehensive income	$	176,008	$	235,019	$	767,815	$	594,665

Basic net income per share	Basic net income per share	$	2.71	$	1.45	$	4.78	$	2.74	Basic net income per share	$	1.81	$	1.87	$	6.60	$	4.61
Diluted net income per share	Diluted net income per share	$	2.67	$	1.44	$	4.71	$	2.71	Diluted net income per share	$	1.78	$	1.85	$	6.50	$	4.56

Basic weighted average shares outstanding	Basic weighted average shares outstanding	128,405		133,275		129,447		133,888		Basic weighted average shares outstanding	124,980		131,845		127,944		133,201
Dilutive effect of outstanding stock awards	Dilutive effect of outstanding stock awards	1,933		1,581		1,771		1,388		Dilutive effect of outstanding stock awards	2,210		1,591		1,895		1,460
Diluted weighted average shares outstanding	Diluted weighted average shares outstanding	130,338		134,856		131,218		135,276		Diluted weighted average shares outstanding	127,190		133,436		129,839		134,661

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

C.H. ROBINSON WORLDWIDE, INC.

Condensed Consolidated Statements of Stockholders’ Investment

(unaudited, in thousands, except per share data)


		Common Shares Outstanding	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Stockholders’ Investment			Common Shares Outstanding	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Stockholders’ Investment
Balance December 31, 2021	Balance December 31, 2021	129,186	$	12,919	$	673,628	$	4,936,861	$	(61,134)	$	(3,540,340)	$	2,021,934	Balance December 31, 2021	129,186	$	12,919	$	673,628	$	4,936,861	$	(61,134)	$	(3,540,340)	$	2,021,934
Net income	Net income						270,348						270,348		Net income						270,348						270,348
Foreign currency adjustments	Foreign currency adjustments								6,870				6,870		Foreign currency adjustments								6,870				6,870
Dividends declared, $0.55 per share	Dividends declared, $0.55 per share						(72,542)						(72,542)		Dividends declared, $0.55 per share						(72,542)						(72,542)
Stock issued for employee benefit plans	Stock issued for employee benefit plans	418	42		(17,377)						26,239		8,904		Stock issued for employee benefit plans	418	42		(17,377)						26,239		8,904
Stock-based compensation expense	Stock-based compensation expense	—	—		24,606						—		24,606		Stock-based compensation expense	—	—		24,606						—		24,606
Repurchase of common stock	Repurchase of common stock	(1,593)	(160)								(164,458)		(164,618)		Repurchase of common stock	(1,593)	(160)								(164,458)		(164,618)
Balance March 31, 2022	Balance March 31, 2022	128,011	$	12,801	$	680,857	$	5,134,667	$	(54,264)	$	(3,678,559)	$	2,095,502	Balance March 31, 2022	128,011	12,801		680,857		5,134,667		(54,264)		(3,678,559)		2,095,502
Net income	Net income						348,185						348,185		Net income						348,185						348,185
Foreign currency adjustments	Foreign currency adjustments								(33,596)				(33,596)		Foreign currency adjustments								(33,596)				(33,596)
Dividends declared, $0.55 per share	Dividends declared, $0.55 per share						(71,506)						(71,506)		Dividends declared, $0.55 per share						(71,506)						(71,506)
Stock issued for employee benefit plans	Stock issued for employee benefit plans	316	31		377						20,478		20,886		Stock issued for employee benefit plans	316	31		377						20,478		20,886
Stock-based compensation expense	Stock-based compensation expense	—	—		27,929						—		27,929		Stock-based compensation expense	—	—		27,929						—		27,929
Repurchase of common stock	Repurchase of common stock	(3,211)	(320)								(334,665)		(334,985)		Repurchase of common stock	(3,211)	(320)								(334,665)		(334,985)
Balance June 30, 2022	Balance June 30, 2022	125,116	$	12,512	$	709,163	$	5,411,346	$	(87,860)	$	(3,992,746)	$	2,052,415	Balance June 30, 2022	125,116	12,512		709,163		5,411,346		(87,860)		(3,992,746)		2,052,415

Net income															Net income						225,798						225,798
Foreign currency adjustments															Foreign currency adjustments								(49,790)				(49,790)
Dividends declared, $0.55 per share															Dividends declared, $0.55 per share						(69,552)						(69,552)
Stock issued for employee benefit plans															Stock issued for employee benefit plans	555	56		(3,478)						40,450		37,028
Stock-based compensation expense															Stock-based compensation expense	—	—		25,811						—		25,811
Repurchase of common stock															Repurchase of common stock	(5,077)	(509)								(543,640)		(544,149)
Balance September 30, 2022															Balance September 30, 2022	120,594	$	12,059	$	731,496	$	5,567,592	$	(137,650)	$	(4,495,936)	$	1,677,561

Common
Shares
Outstanding Amount Additional
Paid-in
Capital Retained
Earnings Accumulated Other Comprehensive Loss Treasury
Stock Total
Stockholders’
Investment
Balance December 31, 2020 134,298 $ 13,430 $ 566,022 $ 4,372,833 $ (45,998) $ (3,026,354) $ 1,879,933
Net income 173,305 173,305
Foreign currency adjustments (7,286) (7,286)
Dividends declared, $0.51 per share (69,606) (69,606)
Stock issued for employee benefit plans 357 36 (21,805) 18,766 (3,003)
Issuance of restricted stock, net of forfeitures (26) (3) 3 —
Stock-based compensation expense — — 23,989 — 23,989
Repurchase of common stock (1,386) (139) (129,006) (129,145)
Balance March 31, 2021 133,243 $ 13,324 $ 568,209 $ 4,476,532 $ (53,284) $ (3,136,594) $ 1,868,187
Net income 193,789 193,789
Foreign currency adjustments (162) (162)
Dividends declared, $0.51 per share (69,094) (69,094)
Stock issued for employee benefit plans 250 25 418 16,151 16,594
Stock-based compensation expense — — 29,161 — 29,161
Repurchase of common stock (1,358) (136) (132,169) (132,305)
Balance June 30, 2021 132,135 $ 13,213 $ 597,788 $ 4,601,227 $ (53,446) $ (3,252,612) $ 1,906,170

Table of Contents


	Common Shares Outstanding	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Stockholders’ Investment
Balance December 31, 2020	134,298	$	13,430	$	566,022	$	4,372,833	$	(45,998)	$	(3,026,354)	$	1,879,933
Net income						173,305						173,305
Foreign currency adjustments								(7,286)				(7,286)
Dividends declared, $0.51 per share						(69,606)						(69,606)
Stock issued for employee benefit plans	357	36		(21,805)						18,766		(3,003)
Issuance of restricted stock, net of forfeitures	(26)	(3)		3								—
Stock-based compensation expense	—	—		23,989						—		23,989
Repurchase of common stock	(1,386)	(139)								(129,006)		(129,145)
Balance March 31, 2021	133,243	13,324		568,209		4,476,532		(53,284)		(3,136,594)		1,868,187
Net income						193,789						193,789
Foreign currency adjustments								(162)				(162)
Dividends declared, $0.51 per share						(69,094)						(69,094)
Stock issued for employee benefit plans	250	25		418						16,151		16,594
Stock-based compensation expense	—	—		29,161						—		29,161
Repurchase of common stock	(1,358)	(136)								(132,169)		(132,305)
Balance June 30, 2021	132,135	13,213		597,788		4,601,227		(53,446)		(3,252,612)		1,906,170
Net income						247,053						247,053
Foreign currency adjustments								(12,034)				(12,034)
Dividends declared, $0.51 per share						(68,316)						(68,316)
Stock issued for employee benefit plans	91	9		(1,418)						5,755		4,346
Stock-based compensation expense	—	—		40,812						—		40,812
Repurchase of common stock	(1,850)	(184)								(167,047)		(167,231)
Balance September 30, 2021	130,376	$	13,038	$	637,182	$	4,779,964	$	(65,480)	$	(3,413,904)	$	1,950,800

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

C.H. ROBINSON WORLDWIDE, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited, in thousands)


		Six Months Ended June 30,					Nine Months Ended September 30,
		2022		2021			2022		2021
OPERATING ACTIVITIES	OPERATING ACTIVITIES					OPERATING ACTIVITIES
Net income	Net income	$	618,533	$	367,094	Net income	$	844,331	$	614,147
Adjustments to reconcile net income to net cash used for operating activities:	Adjustments to reconcile net income to net cash used for operating activities:					Adjustments to reconcile net income to net cash used for operating activities:
Depreciation and amortization	Depreciation and amortization	45,748		46,215		Depreciation and amortization	68,723		68,621
Provision for credit losses	Provision for credit losses	(2,142)		(36)		Provision for credit losses	(2,407)		3,979
Stock-based compensation	Stock-based compensation	52,535		53,150		Stock-based compensation	78,346		93,962
Deferred income taxes	Deferred income taxes	(5,844)		(2,474)		Deferred income taxes	(76,362)		(11,683)
Excess tax benefit on stock-based compensation	Excess tax benefit on stock-based compensation	(7,553)		(9,367)		Excess tax benefit on stock-based compensation	(12,440)		(10,830)
Other operating activities	Other operating activities	(26,356)		933		Other operating activities	(24,011)		1,384
Changes in operating elements, net of acquisitions:	Changes in operating elements, net of acquisitions:					Changes in operating elements, net of acquisitions:
Receivables	Receivables	(378,641)		(717,340)		Receivables	66,536		(1,290,485)
Contract assets	Contract assets	(65,362)		(96,154)		Contract assets	90,481		(220,889)
Prepaid expenses and other	Prepaid expenses and other	(14,170)		(38,971)		Prepaid expenses and other	13,437		(38,525)
Accounts payable and outstanding checks	Accounts payable and outstanding checks	37,207		406,875		Accounts payable and outstanding checks	(109,493)		595,036
Accrued compensation	Accrued compensation	(9,673)		12,115		Accrued compensation	6,701		35,413
Accrued transportation expense	Accrued transportation expense	62,506		73,167		Accrued transportation expense	(62,278)		165,580
Accrued income taxes	Accrued income taxes	(54,964)		(4,431)		Accrued income taxes	(24,202)		6,400
Other accrued liabilities	Other accrued liabilities	1,391		210		Other accrued liabilities	22,209		4,947
Other assets and liabilities	Other assets and liabilities	(1,886)		1,612		Other assets and liabilities	(2,782)		2,043
Net cash provided by operating activities	Net cash provided by operating activities	251,329		92,598		Net cash provided by operating activities	876,789		19,100

INVESTING ACTIVITIES	INVESTING ACTIVITIES					INVESTING ACTIVITIES
Purchases of property and equipment	Purchases of property and equipment	(36,781)		(12,856)		Purchases of property and equipment	(50,719)		(26,503)
Purchases and development of software	Purchases and development of software	(32,622)		(16,981)		Purchases and development of software	(49,935)		(26,062)
Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	—		(14,749)		Acquisitions, net of cash acquired	—		(14,749)

Other investing activities		63,208		—
Proceeds from sale of property and equipment						Proceeds from sale of property and equipment	63,208		—
Net cash used for investing activities	Net cash used for investing activities	(6,195)		(44,586)		Net cash used for investing activities	(37,446)		(67,314)

FINANCING ACTIVITIES	FINANCING ACTIVITIES					FINANCING ACTIVITIES
Proceeds from stock issued for employee benefit plans	Proceeds from stock issued for employee benefit plans	53,574		36,674		Proceeds from stock issued for employee benefit plans	93,415		43,183
Stock tendered for payment of withholding taxes	Stock tendered for payment of withholding taxes	(23,784)		(23,083)		Stock tendered for payment of withholding taxes	(26,597)		(25,246)
Repurchase of common stock	Repurchase of common stock	(490,699)		(262,904)		Repurchase of common stock	(1,023,578)		(428,801)
Cash dividends	Cash dividends	(145,268)		(139,756)		Cash dividends	(216,258)		(208,926)
Proceeds from long-term borrowings	Proceeds from long-term borrowings	200,000		—		Proceeds from long-term borrowings	200,000		—

Payments on long-term borrowings						Payments on long-term borrowings	—		(2,048)
Proceeds from short-term borrowings	Proceeds from short-term borrowings	2,735,000		1,661,000		Proceeds from short-term borrowings	3,674,000		2,768,000
Payments on short-term borrowings	Payments on short-term borrowings	(2,586,000)		(1,390,038)		Payments on short-term borrowings	(3,595,000)		(2,136,251)

Net cash used for financing activities		(257,177)		(118,107)
Net cash (used for) provided by financing activities						Net cash (used for) provided by financing activities	(894,018)		9,911

Effect of exchange rates on cash and cash equivalents	Effect of exchange rates on cash and cash equivalents	(6,445)		(898)		Effect of exchange rates on cash and cash equivalents	(15,206)		(2,844)
Net change in cash and cash equivalents	Net change in cash and cash equivalents	(18,488)		(70,993)		Net change in cash and cash equivalents	(69,881)		(41,147)
Cash and cash equivalents, beginning of period	Cash and cash equivalents, beginning of period	257,413		243,796		Cash and cash equivalents, beginning of period	257,413		243,796
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	238,925	$	172,803	Cash and cash equivalents, end of period	$	187,532	$	202,649

See accompanying notes to the condensed consolidated financial statements.

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C.H. ROBINSON WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. BASIS OF PRESENTATION

C.H. Robinson Worldwide, Inc., and our subsidiaries (“the company,” “we,” “us,” or “our”) are a global provider of transportation services and logistics solutions operating through a network of offices located in North America, Europe, Asia, Oceania, and South America. The consolidated financial statements include the accounts of C.H. Robinson Worldwide, Inc., and our majority owned and controlled subsidiaries. Our minority interests in subsidiaries are not significant. All intercompany transactions and balances have been eliminated in the consolidated financial statements.

Our reportable segments are ~~NAST~~North American Surface Transportation (“NAST”) and Global Forwarding, with all other segments included in All Other and Corporate. The All Other and Corporate reportable segment includes Robinson Fresh, Managed Services, Other Surface Transportation outside of North America, and other miscellaneous revenues and unallocated corporate expenses. For financial information concerning our reportable segments, refer to Note 9, Segment Reporting.

The condensed consolidated financial statements, which are unaudited, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In our opinion, these financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the financial statements for the interim periods presented. Interim results are not necessarily indicative of results for a full year.

Consistent with SEC rules and regulations, we have condensed or omitted certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States. You should read the condensed consolidated financial statements and related notes in conjunction with the consolidated financial statements and notes in our Annual Report on Form 10-K for the year ended December 31, 2021.

PROPERTY AND EQUIPMENT

During the second quarter of 2022, we sold an office building in Kansas City, Missouri, ~~that~~which had been previously classified as held-for-sale assets, for a sales price of $55 million and recognized a gain of $23.5 million on the sale of the building in the ~~three~~nine months ended ~~June~~September 30, 2022. We simultaneously entered into an agreement to lease the office building for 10 years.

RECENTLY ISSUED ACCOUNTING STANDARDS

For the ~~three~~nine months ended ~~June~~September 30, 2022, there were no recently issued or newly adopted accounting pronouncements that had, or are expected to have, a material impact to our consolidated financial statements.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Note 1 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2021, includes a summary of the significant accounting policies and methods used in the preparation of our consolidated financial statements.

NOTE 2. GOODWILL AND OTHER INTANGIBLE ASSETS

The change in carrying amount of goodwill is as follows (in thousands):


		NAST		Global Forwarding		All Other and Corporate		Total			NAST		Global Forwarding		All Other and Corporate		Total
Balance, December 31, 2021	Balance, December 31, 2021	$	1,196,333	$	210,391	$	78,030	$	1,484,754	Balance, December 31, 2021	$	1,196,333	$	210,391	$	78,030	$	1,484,754

Foreign currency translation	Foreign currency translation	(7,319)		(2,907)		(1,673)		(11,899)		Foreign currency translation	(15,180)		(7,839)		(3,432)		(26,451)
Balance, June 30, 2022		$	1,189,014	$	207,484	$	76,357	$	1,472,855
Balance, September 30, 2022										Balance, September 30, 2022	$	1,181,153	$	202,552	$	74,598	$	1,458,303

Goodwill is tested at least annually for impairment on November 30, or more frequently if events or changes in circumstances indicate that the asset might be impaired. We first perform a qualitative assessment to determine whether it is more likely than not that the fair value of our reporting units is less than their respective carrying value (“Step Zero Analysis”). If the Step Zero Analysis indicates it is more likely than not that the fair value of our reporting units is less than their respective carrying value, an additional impairment assessment is performed (“Step One Analysis”). As part of our Step Zero Analysis, we determined that more likely than not criteria had not been met, and therefore a Step One Analysis was not required as of ~~June~~September 30, 2022.

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Identifiable intangible assets consisted of the following (in thousands):


		June 30, 2022						December 31, 2021							September 30, 2022						December 31, 2021
		Cost		Accumulated Amortization		Net		Cost		Accumulated Amortization		Net			Cost		Accumulated Amortization		Net		Cost		Accumulated Amortization		Net
Finite-lived intangibles	Finite-lived intangibles													Finite-lived intangibles
Customer relationships	Customer relationships	$	163,580	$	(96,391)	$	67,189	$	169,308	$	(88,302)	$	81,006	Customer relationships	$	156,619	$	(97,097)	$	59,522	$	169,308	$	(88,302)	$	81,006

Indefinite-lived intangibles	Indefinite-lived intangibles													Indefinite-lived intangibles
Trademarks	Trademarks	8,600		—		8,600		8,600		—		8,600		Trademarks	8,600		—		8,600		8,600		—		8,600
Total intangibles	Total intangibles	$	172,180	$	(96,391)	$	75,789	$	177,908	$	(88,302)	$	89,606	Total intangibles	$	165,219	$	(97,097)	$	68,122	$	177,908	$	(88,302)	$	89,606

Amortization expense for other intangible assets is as follows (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Amortization expense $ 5,957 $ 6,200 $ 11,991 $ 13,286


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Amortization expense	$	5,782	$	6,130	$	17,773	$	19,416

Finite-lived intangible assets, by reportable segment, as of ~~June~~September 30, 2022, will be amortized over their remaining lives as follows (in thousands):


		NAST		Global Forwarding		All Other and Corporate		Total			NAST		Global Forwarding		All Other and Corporate		Total
Remaining 2022	Remaining 2022	$	4,048	$	7,107	$	529	$	11,684	Remaining 2022	$	2,021	$	3,326	$	243	$	5,590
2023	2023	8,096		11,685		1,058		20,839		2023	8,084		10,929		974		19,987
2024	2024	7,990		3,521		1,058		12,569		2024	8,008		3,266		974		12,248
2025	2025	7,857		2,606		1,058		11,521		2025	7,857		2,066		974		10,897
2026	2026	7,857		—		723		8,580		2026	7,857		335		666		8,858
Thereafter	Thereafter	1,310		—		686		1,996		Thereafter	1,310		—		632		1,942
Total	Total							$	67,189	Total							$	59,522

NOTE 3. FAIR VALUE MEASUREMENT

Accounting guidance on fair value measurements for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

•Level 1 — Quoted market prices in active markets for identical assets or liabilities.

•Level 2 — Observable market-based inputs or unobservable inputs that are corroborated by market data.

•Level 3 — Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets.

A financial asset or liability’s classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement.

We had no Level 3 assets or liabilities as of and during the periods ended ~~June~~September 30, 2022 and December 31, 2021. There were no transfers between levels during the period.

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NOTE 4. FINANCING ARRANGEMENTS

The components of our short-term and long-term debt and the associated interest rates were as follows (dollars in thousands):


		Average interest rate as of					Carrying value as of					Average interest rate as of					Carrying value as of
		June 30, 2022		December 31, 2021		Maturity	June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021		Maturity	September 30, 2022		December 31, 2021
Revolving credit facility	Revolving credit facility	2.82	%	1.23	%	October 2023	$	174,000	$	525,000	Revolving credit facility	4.27	%	1.23	%	October 2023	$	104,000	$	525,000
364-day revolving credit facility	364-day revolving credit facility	2.03	%	—		May 2023	500,000		—		364-day revolving credit facility	3.50	%	—		May 2023	500,000		—
Senior Notes, Series A	Senior Notes, Series A	3.97	%	3.97	%	August 2023	175,000		175,000		Senior Notes, Series A	3.97	%	3.97	%	August 2023	175,000		175,000
Senior Notes, Series B	Senior Notes, Series B	4.26	%	4.26	%	August 2028	150,000		150,000		Senior Notes, Series B	4.26	%	4.26	%	August 2028	150,000		150,000
Senior Notes, Series C	Senior Notes, Series C	4.60	%	4.60	%	August 2033	175,000		175,000		Senior Notes, Series C	4.60	%	4.60	%	August 2033	175,000		175,000
Receivables securitization facility (1)		2.26	%	0.73	%	November 2023	499,448		299,481
Receivables Securitization Facility (1)											Receivables Securitization Facility (1)	3.74	%	0.73	%	November 2023	499,552		299,481
Senior Notes (1)	Senior Notes (1)	4.20	%	4.20	%	April 2028	594,607		594,168		Senior Notes (1)	4.20	%	4.20	%	April 2028	594,828		594,168
Total debt	Total debt						2,268,055		1,918,649		Total debt						2,198,380		1,918,649
Less: Current maturities and short-term borrowing	Less: Current maturities and short-term borrowing						(674,000)		(525,000)		Less: Current maturities and short-term borrowing						(779,000)		(525,000)
Long-term debt	Long-term debt						$	1,594,055	$	1,393,649	Long-term debt						$	1,419,380	$	1,393,649

(1) Net of unamortized discounts and issuance costs.

SENIOR UNSECURED REVOLVING CREDIT FACILITY

We have a senior unsecured revolving credit facility (the “Credit Agreement”) with a total availability of $1 billion and a maturity date of October 24, 2023. Borrowings under the Credit Agreement generally bear interest at a variable rate determined by a pricing schedule or the base rate (which is the highest of (a) the administrative agent's prime rate, (b) the federal funds rate plus 0.50 percent, or (c) the sum of applicable LIBOR plus 1.13 percent). In addition, there is a commitment fee on the average daily undrawn stated amount under each letter of credit issued under the facility ranging from 0.075 percent to 0.200 percent. The recorded amount of borrowings outstanding, if any, approximates fair value because of the short maturity period of the debt.

The Credit Agreement contains various restrictions and covenants that require us to maintain certain financial ratios, including a maximum leverage ratio of 3.50 to 1.00. The Credit Agreement also contains customary events of default. On November 19, 2021, we amended the Credit Agreement to among other things, facilitate the terms of the Receivables Securitization Facility and include provisions for benchmark replacements to LIBOR.

364-DAY UNSECURED REVOLVING CREDIT FACILITY

On May 6, 2022, we entered into an unsecured revolving credit facility (the “364-day Credit Agreement”) with a total availability of $500 million and a maturity date of May 5, 2023. Borrowings under the 364-day Credit Agreement generally bear interest at an alternate base rate plus a margin or a term SOFR-based rate plus a margin of 0.625 percent to 1.25 percent. The alternate base rate is determined by a pricing schedule (which is the highest of (a) 0 percent, (b) U.S. Bank’s prime rate, (c) the federal funds effective rate plus 0.50 percent, or (d) a term SOFR-based rate plus 1.00 percent). In addition, there is a commitment fee on the aggregate unused commitments under the 364-day Credit Agreement ranging from 0.05 percent to 0.175 percent per annum. The recorded amount of borrowings outstanding, if any, approximates fair value because of the short maturity period of the debt.

The 364-day Credit Agreement contains various restrictions and covenants that require us to maintain certain financial ratios, including an initial maximum leverage ratio of 3.00 to 1.00. The 364-day Credit Agreement also contains customary events of default.

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NOTE PURCHASE AGREEMENT

On August 23, 2013, we entered into a Note Purchase Agreement with certain institutional investors (the “Purchasers”). On August 27, 2013, the Purchasers purchased an aggregate principal amount of $500 million of our Senior Notes Series A, Senior Notes Series B, and Senior Notes Series C (collectively, the “Notes”). Interest on the Notes is payable semi-annually in arrears. The fair value of the Notes approximated ~~$477.9~~$459.5 million on ~~June~~September 30, 2022. We estimate the fair value of the Notes primarily using an expected present value technique, which is based on observable market inputs using interest rates currently available to companies of similar credit standing for similar terms and remaining maturities and considering our own risk. If the Notes were recorded at fair value, they would be classified as Level 2. Series A matures in August 2023 and is classified as current portion of debt in our Condensed Consolidated Balance Sheets as of September 30, 2022.

The Note Purchase Agreement contains various restrictions and covenants that require us to maintain certain financial ratios, including a maximum leverage ratio of 3.00 to 1.00, a minimum interest coverage ratio of 2.00 to 1.00, and a maximum consolidated priority debt to consolidated total asset ratio of 1520 percent.

The Note Purchase Agreement provides for customary events of default. The occurrence of an event of default would permit certain Purchasers to declare certain Notes then outstanding to be immediately due and payable. Under the terms of the Note Purchase Agreement, the Notes are redeemable, in whole or in part, at 100 percent of the principal amount being redeemed together with a “make-whole amount” (as defined in the Note Purchase Agreement), and accrued and unpaid interest with respect to each Note. The obligations of the company under the Note Purchase Agreement and the Notes are guaranteed by C.H. Robinson Company, LLC, a Delaware ~~corporation~~limited liability company and a wholly-owned subsidiary of the company, and by C.H. Robinson Company, Inc., a Minnesota corporation and an indirect wholly-owned subsidiary of the company. On November 19, 2021, we amended the Note Purchase Agreement to among other things, facilitate the terms of the Receivables Securitization Facility.

U.S. TRADE ACCOUNTS RECEIVABLE SECURITIZATION

On November 19, 2021, we entered into a receivables purchase agreement and related transaction documents with Bank of America, N.A. and Wells Fargo Bank, N.A. to provide a receivables securitization facility (the “Receivables Securitization Facility”). The Receivables Securitization Facility is based on the securitization of our U.S. trade accounts receivable with a total availability of $500 million as of ~~June~~September 30, 2022. The interest rate on borrowings under the Receivables Securitization Facility is based on Bloomberg Short Term Bank Yield Index (“BSBY”) plus a margin. There is also a commitment fee we are required to pay on any unused portion of the facility. The Receivables Securitization Facility expires on November 17, 2023, unless extended by the parties and is recorded as a noncurrent liability as of ~~June~~September 30, 2022. The recorded amount of borrowings outstanding on the Receivables Securitization Facility approximates fair value because it can be redeemed on short notice and the interest rate floats. We consider these borrowings to be a Level 2 financial liability. Borrowings on the Receivables Securitization Facility are included within proceeds on long-term borrowings on the consolidated statement of cash flows.

The Receivables Securitization Facility contains various customary affirmative and negative covenants, and it also contains customary default and termination provisions, which provide for acceleration of amounts owed under the Receivables Securitization Facility upon the occurrence of certain specified events.

On February 1, 2022, we amended the Receivables Securitization Facility primarily to increase the total availability from $300 million to $500 million pursuant to the provisions of the existing agreement. On July 7, 2022, we amended the Receivables Securitization Facility to effectively increase the receivables pool available with respect to the Receivables Securitization Facility.

SENIOR NOTES

On April 9, 2018, we issued senior unsecured notes (“Senior Notes”) through a public offering. The Senior Notes bear an annual interest rate of 4.20 percent payable semi-annually on April 15 and October 15, until maturity on April 15, 2028. Taking into effect the amortization of the original issue discount and all underwriting and issuance expenses, the Senior Notes have an effective yield to maturity of approximately 4.39 percent per annum. The fair value of the Senior Notes, excluding debt discounts and issuance costs, approximated ~~$577.0~~$558.5 million as of ~~June~~September 30, 2022, based primarily on the market prices quoted from external sources. The carrying value of the Senior Notes was ~~$594.6~~$594.8 million as of ~~June~~September 30, 2022.

We may redeem the Senior Notes, in whole or in part, at any time and from time to time prior to their maturity at the applicable redemption prices described in the Senior Notes. Upon the occurrence of a “change of control triggering event” as defined in the Senior Notes (generally, a change of control of us accompanied by a reduction in the credit rating for the Senior Notes), we

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will generally be required to make an offer to repurchase the Senior Notes from holders at 101 percent of their principal amount plus accrued and unpaid interest to the date of repurchase.

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The Senior Notes were issued under an indenture that contains covenants imposing certain limitations on our ability to incur liens or enter into sale and leaseback transactions above certain limits; and consolidate, or merge or transfer substantially all of our assets and those of our subsidiaries on a consolidated basis. It also provides for customary events of default (subject in certain cases to customary grace and cure periods), which include, among other things nonpayment, breach of covenants in the indenture, and certain events of bankruptcy and insolvency. If an event of default occurs and is continuing with respect to the Senior Notes, the trustee or holders of at least 25 percent in principal amount outstanding of the Senior Notes may declare the principal and the accrued and unpaid interest, if any, on all of the outstanding Senior Notes to be due and payable. These covenants and events of default are subject to a number of important qualifications, limitations, and exceptions that are described in the indenture. The indenture does not contain any financial ratios or specified levels of net worth or liquidity to which we must adhere.

In addition to the above financing agreements, we have a $15 million discretionary line of credit with U.S. Bank of which $7.9 million is currently utilized for standby letters of credit related to insurance collateral as of ~~June~~September 30, 2022. These standby letters of credit are renewed annually and were undrawn as of ~~June~~September 30, 2022.

NOTE 5. INCOME TAXES

A reconciliation of the provision for income taxes using the statutory federal income tax rate to our effective income tax rate for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, is as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Federal statutory rate	Federal statutory rate	21.0	%	21.0	%	21.0	%	21.0	%	Federal statutory rate	21.0	%	21.0	%	21.0	%	21.0	%
State income taxes, net of federal benefit	State income taxes, net of federal benefit	2.0		2.0		1.7		2.1		State income taxes, net of federal benefit	2.4		0.6		1.9		1.5
Share based payment awards	Share based payment awards	(0.6)		(0.1)		(0.9)		(1.5)		Share based payment awards	(1.6)		0.4		(1.1)		(0.8)
Foreign tax credits	Foreign tax credits	(1.4)		(1.2)		(1.1)		(0.5)		Foreign tax credits	0.2		(0.1)		(0.8)		(0.3)
Other U.S. tax credits and incentives	Other U.S. tax credits and incentives	(0.3)		(0.8)		(1.0)		(0.9)		Other U.S. tax credits and incentives	(6.2)		(3.0)		(2.3)		(1.7)
Foreign	Foreign	(0.5)		2.0		(0.5)		0.2		Foreign	2.8		(4.2)		0.3		(1.5)
Other	Other	1.1		(1.3)		0.8		(0.3)		Other	(1.7)		1.3		0.2		0.3
Effective income tax rate	Effective income tax rate	21.3	%	21.6	%	20.0	%	20.1	%	Effective income tax rate	16.9	%	16.0	%	19.2	%	18.5	%

We have asserted that the unremitted earnings of a limited number of our foreign subsidiaries are permanently reinvested to support expansion of our international business. If we repatriated all foreign earnings that are considered to be permanently reinvested, the estimated effect on income taxes payable would be an increase of approximately $2.0 million as of ~~June~~September 30, 2022.

On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) in response to the COVID-19 pandemic. The CARES Act allowed for a deferral of the employer share of federal payroll taxes. We have recognized a payroll deferral of $14.7 million under the CARES Act, which is due on December 31, 2022.

As of ~~June~~September 30, 2022, we have ~~$41.0~~$41.6 million of unrecognized tax benefits and related interest and penalties. It is possible the amount of unrecognized tax benefit could change in the next 12 months as a result of a lapse of the statute of limitations and settlements with taxing authorities. The total liability for unrecognized tax benefits is expected to decrease by approximately ~~$2.4~~$1.7 million in the next 12 months due to the lapsing of statutes of limitations. With few exceptions, we are no longer subject to audits of U.S. federal, state and local, or non-U.S. income tax returns before 2015. We are currently under an Internal Revenue Service audit for 2015, 2016 and 2017 tax years.

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NOTE 6. STOCK AWARD PLANS

Stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense as it vests. A summary of our total compensation expense recognized in our condensed consolidated statements of operations and comprehensive income for stock-based compensation is as follows (in thousands):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Stock options	Stock options	$	3,263	$	4,027	$	6,482	$	7,994	Stock options	$	3,262	$	4,070	$	9,744	$	12,064
Stock awards	Stock awards	23,887		24,401		43,950		43,349		Stock awards	21,788		36,012		65,738		79,361
Company expense on ESPP discount	Company expense on ESPP discount	779		733		2,103		1,807		Company expense on ESPP discount	761		730		2,864		2,537
Total stock-based compensation expense	Total stock-based compensation expense	$	27,929	$	29,161	$	52,535	$	53,150	Total stock-based compensation expense	$	25,811	$	40,812	$	78,346	$	93,962

On May 5, 2022, our shareholders approved a 2022 Equity Incentive Plan (the “Plan”) and authorized an initial 4,261,884 shares for issuance of awards thereunder. Upon approval of the Plan, no new awards may be made under our 2013 Equity Incentive Plan. The Plan allows us to grant certain stock awards, including stock options at fair market value, performance-based restricted stock units and shares, and time-based restricted stock units, to our key employees and non-employee directors. ~~Approximately 4,424,631~~There were 4,432,184 shares ~~were~~ available for stock awards under the Plan as of ~~June~~September 30, 2022. Shares subject to awards under the Plan or certain of our prior plans that expire or are canceled without delivery of shares or that are settled in cash generally become available again for issuance under the Plan.

Stock Options - We have awarded stock options to certain key employees through 2020. The fair value of these options was established based on the market price on the date of grant calculated using the Black-Scholes option pricing model. Changes in measured stock price volatility and interest rates were the primary reasons for changes in the fair value. These grants are being expensed based on the terms of the awards. As of ~~June~~September 30, 2022, unrecognized compensation expense related to stock options was ~~$20.0~~$16.7 million. The amount of future expense to be recognized will be based on the passage of time and the employees' continued employment.

Stock Awards - We have awarded performance-based restricted shares, performance-based restricted stock units (“PSUs”), and time-based restricted stock units. Nearly all of our awards contain restrictions on the awardees’ ability to sell or transfer vested awards for a specified period of time. The fair value of these awards is established based on the market price on the date of grant, discounted for any post-vesting holding restrictions. The discounts on outstanding grants with post-vesting holding restrictions vary from 12 percent to 24 percent and are calculated using the Black-Scholes option pricing model-protective put method. The duration of the restriction period to sell or transfer vested awards, changes in the measured stock price volatility and changes in interest rates are the primary reasons for changes in the discounts. These grants are being expensed based on the terms of the awards.

Performance-based Awards

We have awarded performance-based restricted shares through 2020 to certain key ~~employees and non-employee directors.~~employees. These awards vest over a five-year period based on the company’s earnings growth. Beginning in 2021, we have awarded annually PSUs to certain key employees. These PSUs vest over a three-year period based on the company's cumulative three-year earnings per share growth and annual adjusted gross profit growth. These PSUs contain an upside opportunity of up to 200 percent of target contingent upon obtaining certain earnings per share and adjusted gross profit growth targets.

Time-based Awards

We award time-based restricted stock units to certain key ~~employees and non-employee directors.~~employees. Time-based awards granted through 2020 vest over a five-year period. Beginning in 2021, we have granted annually time-based awards that vest over a three-year period. These awards vest primarily based on the passage of time and the employee’s continued employment. These grants are being expensed based on the terms of the awards.

We granted 330,072 PSUs and 634,118 time-based restricted stock units on February 9, 2022. The PSUs and time-based restricted stock unit awards had a weighted average grant date fair value of $76.74 and $74.67, respectively. Time-based awards are eligible to vest over a three-year period with a first vesting date of December 31, 2022.

We have also issued restricted stock units to certain key employees and non-employee directors, which are fully vested upon issuance. These units contain restrictions on the awardees’ ability to sell or transfer vested units for a specified period of time. The fair value of these units is established using the same method discussed above. These grants have been expensed during the year they were earned.

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As of ~~June~~September 30, 2022, there was unrecognized compensation expense of ~~$144.3~~$122.7 million related to previously granted stock awards assuming maximum achievement is obtained on our performance-based awards. The amount of future expense to be recognized will be based on the passage of time, the company’s earnings and adjusted gross profit growth, and certain other conditions.

Employee Stock Purchase Plan - Our 1997 Employee Stock Purchase Plan (“ESPP”) allows our employees to contribute up to $10,000 of their annual cash compensation to purchase company stock. The purchase price is determined using the closing price on the last day of each quarter discounted by 15 percent. Shares vest immediately. The following is a summary of the employee stock purchase plan activity (dollars in thousands):

Three Months Ended June 30, 2022
Shares purchased
by employees
Aggregate cost
to employees
Expense recognized
by the company
51,276 $ 4,419 $ 779


Three Months Ended September 30, 2022
Shares purchased by employees	Aggregate cost to employees		Expense recognized by the company
52,660	$	4,311	$	761

NOTE 7. LITIGATION

We are not subject to any pending or threatened litigation other than routine litigation arising in the ordinary course of our business operations, including certain contingent auto liability cases. For some legal proceedings, we have accrued an amount that reflects the aggregate liability deemed probable and estimable, but this amount is not material to our condensed consolidated financial position, results of operations, or cash flows. Because of the preliminary nature of many of these proceedings, the difficulty in ascertaining the applicable facts relating to many of these proceedings, the inconsistent treatment of claims made in many of these proceedings, and the difficulty of predicting the settlement value of many of these proceedings, we are often unable to estimate an amount or range of any reasonably possible additional losses. However, based upon our historical experience, the resolution of these proceedings is not expected to have a material effect on our consolidated financial position, results of operations, or cash flows.

NOTE 8. ACQUISITIONS

Combinex Holding B.V.

On June 3, 2021, we acquired all of the outstanding shares of Combinex to strengthen our European road transportation presence. Total purchase consideration, net of cash acquired was $14.7 million, which was paid in cash.

Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands):


	Estimated Life (years)
Customer relationships	7	$	3,942

There was $10.8 million of goodwill recorded related to the acquisition of Combinex. The Combinex goodwill is a result of acquiring and retaining the Combinex workforce and expected synergies from integrating its business into ours. Purchase accounting is considered complete. The goodwill will not be deductible for tax purposes. The results of operations of Combinex have been included as part of the All Other and Corporate segment in our consolidated financial statements since June 3, 2021.

NOTE 9. SEGMENT REPORTING

Our reportable segments are based on our method of internal reporting, which generally segregates the segments by service line and the primary services they provide to our customers. We identify 2two reportable segments in addition to All Other and Corporate as summarized below:

•North American Surface Transportation—NAST provides freight transportation services across North America through a network of offices in the United States, Canada, and Mexico. The primary services provided by NAST include truckload and less than truckload (“LTL”) transportation services.

•Global Forwarding—Global Forwarding provides global logistics services through an international network of offices in North America, Asia, Europe, Oceania, and South America and also contracts with independent agents worldwide. The primary services provided by Global Forwarding include ocean freight services, air freight services, and customs brokerage.

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•All Other and Corporate—All Other and Corporate includes our Robinson Fresh and Managed Services segments, as well as Other Surface Transportation outside of North America and other miscellaneous revenues and unallocated corporate expenses. Robinson Fresh provides sourcing services including the buying, selling, and marketing of fresh fruits, vegetables, and other perishable items. Managed Services provides Transportation Management Services, or Managed TMS®. Other Surface Transportation revenues are primarily earned by Europe Surface Transportation. Europe Surface Transportation provides transportation and logistics services including truckload and groupage services across Europe.

The internal reporting of segments is defined, based in part, on the reporting and review process used by our chief operating decision maker (“CODM”), our Chief Executive Officer. The accounting policies of our reportable segments are the same as those described in the summary of significant accounting policies located in Note 1 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2021. We do not report our intersegment revenues by reportable segment to our CODM and do not believe they are a meaningful metric for evaluating the performance of our reportable segments.

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Reportable segment information as of, and for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, is as follows (dollars in thousands):


		NAST		Global Forwarding		All Other and Corporate		Consolidated			NAST		Global Forwarding		All Other and Corporate		Consolidated
Three Months Ended June 30, 2022
Three Months Ended September 30, 2022										Three Months Ended September 30, 2022
Total revenues	Total revenues	$	4,147,046	$	2,093,190	$	558,239	$	6,798,475	Total revenues	$	4,002,461	$	1,511,115	$	501,800	$	6,015,376
Income from operations		276,499		167,557		25,609		469,665
Income (loss) from operations										Income (loss) from operations	211,899		85,953		(10,243)		287,609
Depreciation and amortization	Depreciation and amortization	6,123		5,471		11,668		23,262		Depreciation and amortization	5,739		5,368		11,868		22,975
Total assets(1)	Total assets(1)	3,688,215		2,851,114		918,110		7,457,439		Total assets(1)	3,624,333		2,266,923		904,274		6,795,530
Average headcount		7,552		5,759		4,582		17,893
Average employee headcount										Average employee headcount	7,493		5,861		4,691		18,045

		NAST		Global Forwarding		All Other and Corporate		Consolidated			NAST		Global Forwarding		All Other and Corporate		Consolidated
Three Months Ended June 30, 2021
Three Months Ended September 30, 2021										Three Months Ended September 30, 2021
Total revenues	Total revenues	$	3,585,481	$	1,450,794	$	496,451	$	5,532,726	Total revenues	$	3,814,988	$	1,978,901	$	469,806	$	6,263,695
Income from operations		151,092		108,212		1,300		260,604
Income (loss) from operations										Income (loss) from operations	149,035		165,155		(3,421)		310,769
Depreciation and amortization	Depreciation and amortization	6,534		6,276		10,127		22,937		Depreciation and amortization	6,620		5,427		10,359		22,406
Total assets(1)	Total assets(1)	3,278,540		1,852,473		775,551		5,906,564		Total assets(1)	3,437,461		2,438,106		727,039		6,602,606
Average headcount		6,580		4,909		3,916		15,405
Average employee headcount										Average employee headcount	6,764		5,167		4,037		15,968


		NAST		Global Forwarding		All Other and Corporate		Consolidated			NAST		Global Forwarding		All Other and Corporate		Consolidated
Six Months Ended June 30, 2022
Nine Months Ended September 30, 2022										Nine Months Ended September 30, 2022
Total revenues	Total revenues	$	8,261,935	$	4,287,587	$	1,064,906	$	13,614,428	Total revenues	$	12,264,396	$	5,798,702	$	1,566,706	$	19,629,804
Income from operations	Income from operations	458,853		335,195		21,091		815,139		Income from operations	670,752		421,148		10,848		1,102,748
Depreciation and amortization	Depreciation and amortization	12,362		11,026		22,360		45,748		Depreciation and amortization	18,101		16,394		34,228		68,723
Total assets(1)	Total assets(1)	3,688,215		2,851,114		918,110		7,457,439		Total assets(1)	3,624,333		2,266,923		904,274		6,795,530
Average headcount		7,442		5,690		4,422		17,554
Average employee headcount										Average employee headcount	7,420		5,735		4,497		17,652

		NAST		Global Forwarding		All Other and Corporate		Consolidated			NAST		Global Forwarding		All Other and Corporate		Consolidated
Six Months Ended June 30, 2021
Nine Months Ended September 30, 2021										Nine Months Ended September 30, 2021
Total revenues	Total revenues	$	6,796,904	$	2,606,833	$	932,858	$	10,336,595	Total revenues	$	10,611,892	$	4,585,734	$	1,402,664	$	16,600,290
Income (loss) from operations	Income (loss) from operations	287,876		198,801		(2,744)		483,933		Income (loss) from operations	436,911		363,956		(6,165)		794,702
Depreciation and amortization	Depreciation and amortization	13,159		11,925		21,131		46,215		Depreciation and amortization	19,779		17,352		31,490		68,621
Total assets(1)	Total assets(1)	3,278,540		1,852,473		775,551		5,906,564		Total assets(1)	3,437,461		2,438,106		727,039		6,602,606
Average headcount		6,578		4,832		3,823		15,233
Average employee headcount										Average employee headcount	6,650		4,951		3,881		15,482

(1) All cash and cash equivalents are included in All Other and Corporate.

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NOTE 10. REVENUE FROM CONTRACTS WITH CUSTOMERS

A summary of our total revenues disaggregated by major service line and timing of revenue recognition is presented below for each of our reportable segments for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 (in thousands):


		Three Months Ended June 30, 2022									Three Months Ended September 30, 2022
		NAST		Global Forwarding		All Other and Corporate		Total			NAST		Global Forwarding		All Other and Corporate		Total
Major Service Lines	Major Service Lines									Major Service Lines
Transportation and logistics services(1)	Transportation and logistics services(1)	$	4,147,046	$	2,093,190	$	225,406	$	6,465,642	Transportation and logistics services(1)	$	4,002,461	$	1,511,115	$	210,788	$	5,724,364
Sourcing(2)	Sourcing(2)	—		—		332,833		332,833		Sourcing(2)	—		—		291,012		291,012
Total	Total	$	4,147,046	$	2,093,190	$	558,239	$	6,798,475	Total	$	4,002,461	$	1,511,115	$	501,800	$	6,015,376

		Three Months Ended June 30, 2021									Three Months Ended September 30, 2021
		NAST		Global Forwarding		All Other and Corporate		Total			NAST		Global Forwarding		All Other and Corporate		Total
Major Service Lines	Major Service Lines									Major Service Lines
Transportation and logistics services(1)	Transportation and logistics services(1)	$	3,585,481	$	1,450,794	$	204,173	$	5,240,448	Transportation and logistics services(1)	$	3,814,988	$	1,978,901	$	206,012	$	5,999,901
Sourcing(2)	Sourcing(2)	—		—		292,278		292,278		Sourcing(2)	—		—		263,794		263,794
Total	Total	$	3,585,481	$	1,450,794	$	496,451	$	5,532,726	Total	$	3,814,988	$	1,978,901	$	469,806	$	6,263,695


		Six Months Ended June 30, 2022									Nine Months Ended September 30, 2022
		NAST		Global Forwarding		All Other and Corporate		Total			NAST		Global Forwarding		All Other and Corporate		Total
Major Service Lines	Major Service Lines									Major Service Lines
Transportation and logistics services(1)	Transportation and logistics services(1)	$	8,261,935	$	4,287,587	$	444,471	$	12,993,993	Transportation and logistics services(1)	$	12,264,396	$	5,798,702	$	655,259	$	18,718,357
Sourcing(2)	Sourcing(2)	—		—		620,435		620,435		Sourcing(2)	—		—		911,447		911,447
Total	Total	$	8,261,935	$	4,287,587	$	1,064,906	$	13,614,428	Total	$	12,264,396	$	5,798,702	$	1,566,706	$	19,629,804

		Six Months Ended June 30, 2021									Nine Months Ended September 30, 2021
		NAST		Global Forwarding		All Other and Corporate		Total			NAST		Global Forwarding		All Other and Corporate		Total
Major Service Lines	Major Service Lines									Major Service Lines
Transportation and logistics services(1)	Transportation and logistics services(1)	$	6,796,904	$	2,606,833	$	396,938	$	9,800,675	Transportation and logistics services(1)	$	10,611,892	$	4,585,734	$	602,950	$	15,800,576
Sourcing(2)	Sourcing(2)	—		—		535,920		535,920		Sourcing(2)	—		—		799,714		799,714
Total	Total	$	6,796,904	$	2,606,833	$	932,858	$	10,336,595	Total	$	10,611,892	$	4,585,734	$	1,402,664	$	16,600,290

(1) Transportation and logistics services performance obligations are completed over time.

(2) Sourcing performance obligations are completed at a point in time.

We typically do not receive consideration and amounts are not due from our ~~customer~~customers prior to the completion of our performance obligation and as such contract liabilities, as of ~~June~~September 30, 2022, and revenue recognized in the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 resulting from contract liabilities, were not significant. Contract assets and accrued expenses-transportation expense fluctuate from period to period primarily based upon shipments in-transit at period end and the timing of customer invoicing.

NOTE 11. LEASES

We determine if our contractual agreements contain a lease at inception. A lease is identified when a contract allows us the right to control an identified asset for a period of time in exchange for consideration. Our lease agreements consist primarily of operating leases for office space, warehouses, office equipment, trailers, and a small number of intermodal containers. We do not have material financing leases. Frequently, we enter into contractual relationships with a wide variety of transportation companies for freight capacity and utilize those relationships to efficiently and cost-effectively arrange the transport of our customers’ freight. These contracts typically have a term of 12 months or less and do not allow us to direct the use or obtain substantially all of the economic benefits of a specifically identified asset. Accordingly, these agreements are not considered leases.

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Our operating leases are included on the consolidated balance sheets as right-of-use lease assets and lease liabilities. A right-of-use lease asset represents our right to use an underlying asset over the term of a lease, while a lease liability represents our obligation to make lease payments arising from the lease. Current and noncurrent lease liabilities are recognized on the commencement date at the present value of lease payments, including non-lease components, which consist primarily of common area maintenance and parking charges. Right-of-use lease assets are also recognized on the commencement date as the total lease liability plus prepaid rents. As our leases typically do not provide an implicit rate, we use our fully collateralized incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is influenced by market interest rates, our credit rating, and lease term and as such, may differ for individual leases.

Our lease agreements typically do not contain variable lease payments, residual value guarantees, purchase options, or restrictive covenants. Many of our leases include the option to renew for a period of months to several years. The term of our leases may include the option to renew when it is reasonably certain that we will exercise that option although these occurrences are seldom. We have lease agreements with lease components (e.g., payments for rent) and non-lease components (e.g., payments for common area maintenance and parking), which are all accounted for as a single lease component.

We do not have material lease agreements that have not yet commenced that are expected to create significant rights or obligations as of ~~June~~September 30, 2022.

Information regarding lease expense, remaining lease term, discount rate, and other select lease information is presented below as of ~~June~~September 30, 2022, and for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, is as follows (dollars in thousands):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
Lease Costs	Lease Costs	2022		2021		2022		2021		Lease Costs	2022		2021		2022		2021
Operating lease expense	Operating lease expense	$	23,082	$	21,459	$	44,727	$	43,021	Operating lease expense	$	23,342	$	21,220	$	68,069	$	64,241
Short-term lease expense	Short-term lease expense	1,137		1,462		3,597		3,063		Short-term lease expense	1,743		2,871		5,340		5,934
Total lease expense	Total lease expense	$	24,219	$	22,921	$	48,324	$	46,084	Total lease expense	$	25,085	$	24,091	$	73,409	$	70,175


		Six Months Ended June 30,					Nine Months Ended September 30,
Other Lease Information	Other Lease Information	2022		2021		Other Lease Information	2022		2021
Operating cash flows from operating leases	Operating cash flows from operating leases	$	43,937	$	42,495	Operating cash flows from operating leases	$	67,939	$	70,997
Right-of-use lease assets obtained in exchange for new lease liabilities	Right-of-use lease assets obtained in exchange for new lease liabilities	87,554		18,299		Right-of-use lease assets obtained in exchange for new lease liabilities	122,869		38,028


Lease Term and Discount Rate	As of ~~June~~September 30, 2022
Weighted average remaining lease term (in years)(1)	6.5
Weighted average discount rate	~~3.0~~3.2	%

(1) The weighted average remaining lease term is significantly impacted by a 15-year lease related to office space in Chicago, IL, which commenced in 2018. Excluding this lease, the weighted average remaining lease term of our agreements is ~~5.1~~5.3 years.

The maturities of lease liabilities as of ~~June~~September 30, 2022, were as follows (in thousands):


Maturity of Lease Liabilities	Maturity of Lease Liabilities	Operating Leases		Maturity of Lease Liabilities	Operating Leases
Remaining 2022	Remaining 2022	$	38,669	Remaining 2022	$	15,277
2023	2023	84,653		2023	87,027
2024	2024	63,944		2024	68,559
2025	2025	47,866		2025	55,424
2026	2026	38,314		2026	45,347
Thereafter	Thereafter	121,832		Thereafter	137,715
Total lease payments	Total lease payments	395,278		Total lease payments	409,349
Less: Interest	Less: Interest	(41,273)		Less: Interest	(45,022)
Present value of lease liabilities	Present value of lease liabilities	$	354,005	Present value of lease liabilities	$	364,327

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NOTE 12. ALLOWANCE FOR CREDIT LOSSES

Our allowance for credit losses is computed using a number of factors including our past credit loss experience, the aging of amounts due from our customers, our customers' credit ratings, in addition to other customer-specific factors. We have also considered recent trends and developments related to the current macroeconomic environment in determining our ending allowance for credit losses for both accounts receivable and contract assets. The allowance for credit losses on contract assets was not significant.

A rollforward of our allowance for credit losses on our accounts receivable balance is presented below for the ~~six~~nine months ended ~~June~~September 30, 2022 (in thousands):


Balance, December 31, 2021	$	41,542
Provision	~~(2,411)~~(1,888)
Write-offs	~~(1,613)~~(6,174)
Balance, ~~June~~September 30, 2022	$	~~37,518~~33,480

Recoveries of amounts previously written off were not significant for the three and ~~six~~nine months ended ~~June~~September 30, 2022.

NOTE 13. CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS

Accumulated other comprehensive loss is included in Stockholders' ~~investment~~Investment on our condensed consolidated balance sheets. The recorded balance on ~~June~~September 30, 2022 and December 31, 2021, was ~~$87.9~~$137.7 million and $61.1 million, respectively. The recorded balance on ~~June~~September 30, 2022 and December 31, 2021 is comprised solely of foreign currency adjustments, including foreign currency translation.

Other comprehensive loss was ~~$33.6 million compared to other comprehensive loss of $0.2~~$49.8 million for the three months ended ~~June~~September 30, 2022 primarily driven by fluctuations in the Euro, Singapore Dollar, Yuan, and Australian Dollar. Other comprehensive loss was $12.0 million for the three months ended September 30, 2021 ~~respectively. Both periods were~~primarily driven ~~primarily~~ by fluctuations in the Singapore Dollar ~~the~~and Australian ~~Dollar, and the Yuan.~~Dollar.

Other comprehensive loss was ~~$26.7 million compared to other comprehensive loss of $7.4~~$76.5 million for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively. Other comprehensive income and loss consisted of foreign currency adjustments, including foreign currency translation, for the three and six months ended June 30, 2022 and 2021. Both periods wereprimarily driven ~~primarily~~ by fluctuations in the Singapore Dollar, Euro, Yuan, and Australian Dollar. Other comprehensive loss was $19.5 million for the nine months ended September 30, 2021 primarily driven by fluctuations in the Singapore Dollar and Australian Dollar.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes.

FORWARD-LOOKING INFORMATION

Our Quarterly Report on Form 10-Q, including this discussion and analysis of our financial condition and results of operations and our disclosures about market risk, contains certain “forward-looking statements.” These statements represent our expectations, beliefs, intentions, or strategies concerning future events that, by their nature, involve risks and uncertainties. Forward-looking statements include, among others, statements about our future performance, the continuation of historical trends, the sufficiency of our sources of capital for future needs, the effects of acquisitions or dispositions, the expected impact of recently issued accounting pronouncements, and the outcome or effects of litigation. Risks that could cause actual results to differ materially from our current expectations include, but are not limited to, changes in economic conditions, including uncertain consumer demand; changes in market demand and pressures on the pricing for our services; fuel price increases or decreases, or fuel shortages; competition and growth rates within the global logistics industry; freight levels and increasing costs and availability of truck capacity or alternative means of transporting freight; risks associated with significant disruptions in the transportation industry; changes in relationships with existing contracted truck, rail, ocean, and air carriers; changes in our customer base due to possible consolidation among our customers; risks with reliance on technology to operate our business; cyber-security related risks; risks associated with operations outside of the United States; our ability to identify or complete suitable acquisitions; our ability to successfully integrate the operations of acquired companies with our historic operations; risks associated with litigation, including contingent auto liability and insurance coverage; risks associated with the potential impact of changes in government regulations; our ability to hire and retain a sufficient number of qualified personnel; risks associated with the changes to income tax regulations; risks associated with the produce industry, including food safety and contamination issues; the impact of war on the economy; changes to our capital structure; changes due to catastrophic events including pandemics such as ~~COVID-19,~~COVID-19; and other risks and uncertainties detailed in our Annual and Quarterly Reports. Therefore, actual results may differ materially from our expectations based on these and other risks and uncertainties, including those described in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on February 23, 2022 as well as the updates to these risk factors included in Part II—“Item 1A, Risk Factors,” herein.

Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update such statement to reflect events or circumstances arising after such date.

OVERVIEW

C.H. Robinson Worldwide, Inc. (“C.H. Robinson,” “the company,” “we,” “us,” or “our”) is one of the world's largest logistics platforms. Our mission is to improve the world's supply chains through our people, processes, and technology by delivering exceptional value to our customers and suppliers. We provide freight transportation services and logistics solutions to companies of all sizes in a wide variety of industries. We operate through a network of offices in North America, Europe, Asia, Oceania, and South America. We offer a global suite of services using tailored, market-leading solutions built by and for supply chain experts. Our global network of supply chain experts work with our customers to drive better supply chain outcomes by leveraging our experience, data, digital solutions, and scale.

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Our adjusted gross profit and adjusted gross profit margin are non-GAAP financial measures. Adjusted gross profit is calculated as gross profit excluding amortization of internally developed software utilized to directly serve our customers and contracted carriers. Adjusted gross profit margin is calculated as adjusted gross profit divided by total revenues. We believe adjusted gross profit and adjusted gross profit margin are useful measures of our ability to source, add value, and sell services and products that are provided by third parties, and we consider adjusted gross profit to be a primary performance measurement. Accordingly, the discussion of our results of operations often focuses on the changes in our adjusted gross profit and adjusted gross profit margin. The reconciliation of gross profit to adjusted gross profit and gross profit margin to adjusted gross profit margin is presented below (dollars in thousands):


		Three Months Ended June 30,								Six Months Ended June 30,									Three Months Ended September 30,						Nine Months Ended September 30,
		2022				2021				2022				2021					2022			2021			2022			2021
Revenues:	Revenues:																	Revenues:
Transportation	Transportation	$	6,465,642			$	5,240,448			$	12,993,993			$	9,800,675			Transportation	$	5,724,364		$	5,999,901		$	18,718,357		$	15,800,576
Sourcing	Sourcing	332,833				292,278				620,435				535,920				Sourcing	291,012			263,794			911,447			799,714
Total revenues	Total revenues	6,798,475				5,532,726				13,614,428				10,336,595				Total revenues	6,015,376			6,263,695			19,629,804			16,600,290
Costs and expenses:	Costs and expenses:																	Costs and expenses:
Purchased transportation and related services	Purchased transportation and related services	5,466,874				4,519,305				11,117,098				8,400,590				Purchased transportation and related services	4,862,541			5,180,390			15,979,639			13,580,980
Purchased products sourced for resale	Purchased products sourced for resale	299,988				264,245				559,521				484,449				Purchased products sourced for resale	265,641			239,113			825,162			723,562
Direct internally developed software amortization	Direct internally developed software amortization	6,640				4,802				12,374				9,449				Direct internally developed software amortization	6,457			5,152			18,831			14,601
Total direct costs	Total direct costs	5,773,502				4,788,352				11,688,993				8,894,488				Total direct costs	5,134,639			5,424,655			16,823,632			14,319,143
Gross profit / Gross profit margin	Gross profit / Gross profit margin	1,024,973		15.1	%	744,374		13.5	%	1,925,435		14.1	%	1,442,107		14.0	%	Gross profit / Gross profit margin	880,737		14.6%	839,040		13.4%	2,806,172		14.3%	2,281,147		13.7%
Plus: Direct internally developed software amortization	Plus: Direct internally developed software amortization	6,640				4,802				12,374				9,449				Plus: Direct internally developed software amortization	6,457			5,152			18,831			14,601
Adjusted gross profit / Adjusted gross profit margin	Adjusted gross profit / Adjusted gross profit margin	$	1,031,613	15.2	%	$	749,176	13.5	%	$	1,937,809	14.2	%	$	1,451,556	14.0	%	Adjusted gross profit / Adjusted gross profit margin	$	887,194	14.7%	$	844,192	13.5%	$	2,825,003	14.4%	$	2,295,748	13.8%

Our adjusted operating margin is a non-GAAP financial measure calculated as operating income divided by adjusted gross profit. We believe adjusted operating margin is a useful measure of our profitability in comparison to our adjusted gross profit, which we consider a primary performance metric as discussed above. The reconciliation of operating margin to adjusted operating margin is presented below (dollars in thousands):


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2022			2021			2022			2021				2022		2021		2022		2021

Total revenues	Total revenues	$	6,798,475		$	5,532,726		$	13,614,428		$	10,336,595		Total revenues	$	6,015,376	$	6,263,695	$	19,629,804	$	16,600,290
Operating income		469,665			260,604			815,139			483,933
Income from operations														Income from operations	287,609		310,769		1,102,748		794,702
Operating margin	Operating margin	6.9		%	4.7		%	6.0		%	4.7		%	Operating margin	4.8%		5.0%		5.6%		4.8%

Adjusted gross profit	Adjusted gross profit	$	1,031,613		$	749,176		$	1,937,809		$	1,451,556		Adjusted gross profit	$	887,194	$	844,192	$	2,825,003	$	2,295,748
Operating income		469,665			260,604			815,139			483,933
Income from operations														Income from operations	287,609		310,769		1,102,748		794,702
Adjusted operating margin	Adjusted operating margin	45.5		%	34.8		%	42.1		%	33.3		%	Adjusted operating margin	32.4%		36.8%		39.0%		34.6%

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MARKET TRENDS

The ~~cost of purchased transportation in the~~ North American surface transportation market ~~remains elevated compared to pre-pandemic levels and~~performed in a more balanced manner in the third quarter of 2022 compared to the ~~prior year but it began to decline~~third quarter of 2021. Declining demand within the second quarter of 2022. The decline of purchased transportation is the result of an increasingly balanced freight market compared to the tight capacity market conditions seen in recent periods. In the secondthird quarter of 2022 ~~moderating consumer~~has resulted in a softening market as demand ~~and carrier~~better aligns with capacity ~~entering~~available in the market ~~has better aligned~~and reduces freight rates. Market conditions in the ~~overall demand with available carrier capacity.~~third quarter of 2021 were historically tight due to driver availability challenges and supply chain disruptions caused by port congestion and weather events. Industry freight volumes, as measured by the Cass Freight Index, ~~decreased 2~~increased 3 percent ~~during~~in the ~~second~~third quarter of 2022 compared to the ~~second~~third quarter of 2021. One of the metrics we use to measure market conditions is the truckload routing guide depth from our Managed Services business. Routing guide depth represents the average number of carriers contacted prior to acceptance when procuring a transportation provider. The average routing guide depth of tender in the ~~second~~third quarter of 2022 declined to ~~1.4,~~1.3, representing that on average, the first carrier in a shipper's routing guide was executing the shipment in most cases. This average routing guide penetration is reflective of a ~~more balanced~~softening freight market compared to the 1.7 average routing guide depth in ~~both~~ the ~~first~~third quarter of 2021.

Ocean freight rates fell significantly in the third quarter of 2022 ~~and~~as global demand slowed. The peak shipping season historically experienced in the ~~second~~third quarter of ~~2021.~~

~~The global forwarding market also began~~each year largely failed to ~~show signs of softening~~materialize as shippers ~~continue~~continued to work through elevated inventory levels and ~~cautiously approach~~ the ~~upcoming peak season due to~~global economy struggled with soaring inflation resulting in reduced consumer spending and macroeconomic ~~uncertainty and declining import demand in the United States.~~uncertainty. The ~~cost~~slowdown of ~~purchased transportation remains elevated compared to pre-pandemic levels and compared to the prior year but it began to decline within the second quarter of 2022 as~~ global demand ~~declined to better align with the industry’s overall capacity. Despite increasing activity from the ports in China reopening from their pandemic related shutdowns, the port congestion~~was most evident on the United States West Coast, ~~has improved due~~as ocean freight rates and volumes declined rapidly compared to moderating demand and the continued diversion of freight to ports in the Southern and Eastern United States. Shippers continue to divert freight away from the United States West Coast to mitigate risk from a potential dockworker labor dispute. Despiteother trade lanes allowing port congestion ~~improving during the second quarter of 2022 on the United States West Coast there is evidence of it edging back up again in addition~~ to ~~increased congestion~~ease. Activity on the United States East Coast ~~due~~remained strong as shippers continued to divert freight to the East Coast and demand from Europe remained healthy resulting in a ~~higher percentage~~more gradual decline in the cost of purchased transportation relative to the United States West Coast. The slowdown of global demand has also had a significant impact on the air freight ~~being routed to their ports.~~market. Air freight ~~conversions back to~~pricing and volumes have significantly declined driven by shippers maintaining higher inventory levels, declining consumer demand, and improving ocean schedule reliability resulting in less ocean freight ~~have continued with more shippers seeking lower supply chain costs by tolerating the longer duration of ocean freight transit.~~converting into air freight. Air freight capacity ~~has improved~~continues to improve and drive rates lower in ~~certain~~many trade lanes due to increased belly capacity as commercial flights become more frequent after being significantly reduced during the COVID-19 pandemic.

BUSINESS TRENDS

Our ~~second quarter of 2022~~ surface transportation results benefited from the ~~softening market conditions,~~declining cost of purchased transportation within the third quarter of 2022, as periods where the cost of purchased transportation ~~begins to decline~~declines often result in improved adjusted gross profits per transaction in our portfolio. Industry freight volumes as measured by the Cass Freight Index ~~decreased 2~~increased 3 percent in the ~~second~~third quarter of 2022 compared to the ~~second~~third quarter of 2021. Our combined NAST truckload and less than truckload (“LTL”) volume decreased ~~2.5~~0.5 percent during the ~~second~~third quarter of 2022. As a result of the softening market conditions, our contractual rates negotiated in prior quarters contributed to an increase in our adjusted gross profit per shipment and ~~significantly~~ reduced the percentage of shipments with negative adjusted gross profit margins. Our average truckload linehaul cost per mile, excluding fuel ~~costs,~~surcharges, decreased ~~5.0~~approximately 17.0 percent during the ~~second~~third quarter of 2022. Our average truckload linehaul rate charged to our customers, excluding fuel surcharges, ~~increased~~decreased approximately ~~1.5~~13.0 percent during the ~~second~~third quarter of 2022.

Our third quarter of 2022 ~~due to our contractual rates negotiated in prior quarters.~~

~~In our~~ global forwarding ~~business, we continued to experience elevated purchased transportation costs for ocean freight, which resulted~~results were largely consistent with the trends discussed above in ~~growth~~the market trends section. We experienced a significant decline in both total ~~revenue~~revenues and ~~cost of purchased transportation~~adjusted gross profits in our ocean and air freight businesses compared to the ~~second~~historically elevated levels achieved in the third quarter of 2021. The ~~cost~~third quarter of 2021 was significantly impacted by port congestion in addition to the equipment and labor shortages that resulted in elevated purchased transportation ~~began to moderate within the second quarter of 2022 as softening demand better aligned with the industry’s overall capacity. This change~~costs. Our total ocean volumes decreased 2.5 percent driven by a decline in ~~market dynamics was most evident on~~ the Transpacific trade lane ~~where we experienced a decline~~partially offset by an increase in Asia Pacific ocean volumes in the second quarter of 2022 compared to the second quarter of 2021. Despite this decline, our total ocean volumes increased 2.5 percent due to strong growth in other regions where we operate.Transatlantic shipments. Air freight tonnage decreased ~~6.0~~16.5 percent as we experienced more customers willing to accept longer transit times by converting their freight to the ~~increasingly balanced~~ ocean freight market.

On June 3, 2021, we acquired Combinex Holding B.V. (“Combinex”) to further expand our European road transportation presence. Our consolidated results include the results of Combinex as of June 3, 2021.

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SELECTED OPERATING PERFORMANCE AND OTHER SIGNIFICANT ITEMS

The following summarizes select ~~second~~third quarter 2022 year-over-year operating comparisons to the ~~second~~third quarter 2021:

•Total revenues ~~increased 22.9~~decreased 4.0 percent to ~~$6.8~~$6.0 billion, driven primarily by lower ocean and air pricing, partially offset by higher pricing ~~across most of our services~~in LTL and ~~higher truckload and ocean volume.~~truckload.

•Gross profits ~~and adjusted~~increased 5.0 percent to $880.7 million. Adjusted gross profits increased ~~37.7~~5.1 percent to ~~$1.0 billion,~~$887.2 million, primarily driven by higher adjusted gross profit per transaction ~~across most of our services and higher~~in truckload, ~~and ocean volume.~~partially offset by the lower adjusted gross profit per transaction in ocean.

•Personnel expenses increased ~~22.6~~9.4 percent to ~~$444.8~~$437.5 million, primarily due to higher average employee headcount, ~~and higher incentive compensation costs. Average headcount~~which increased ~~16.2~~13.0 percent.

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•Other selling, general, and administrative (“SG&A”) expenses ~~decreased 6.8~~increased 21.3 percent to ~~$117.2~~$162.0 million, ~~and included a $25.3 million gain on the sale-leaseback of a facility in Kansas City. This was partially offset~~primarily driven by higher legal settlements, higher purchased and contracted services, and increased travel expenses.

•Income from operations ~~totaled $469.7~~decreased 7.5 percent to $287.6 million, ~~up 80.2 percent due to the increase in adjusted gross profits,~~driven by increased operating expenses partially offset by ~~the increase in operating expenses.~~increased adjusted gross profits.

•Adjusted operating margin of ~~45.5~~32.4 percent ~~increased 1,070~~decreased 440 basis points.

•Interest and other income/expenses, net totaled ~~$27.4~~$16.0 million, consisting primarily of ~~$17.0~~$20.8 million of interest expense, which increased ~~$4.3~~$7.7 million versus last year due primarily to a higher average debt balance, ~~and $10.3~~partially offset by a $5.2 million offavorable impact from foreign currency revaluation and realized foreign currency gains and losses ~~which increased $8.4 million versus last year~~primarily due ~~primarily~~ to a strengthening of the U.S. Dollar versus the ~~Euro and~~ Yuan.

•The effective tax rate in the quarter was ~~21.3~~16.9 percent compared to ~~21.6~~16.0 percent in the ~~second~~third quarter last year.

•Net income totaled ~~$348.2~~$225.8 million, ~~up 79.7%~~down 8.6 percent from a year ago.

•Diluted earnings per share (EPS) ~~increased 85.4~~decreased 3.8 percent to ~~$2.67.~~$1.78.

•Cash flow from operations improved ~~$158.7~~$857.7 million in the ~~six~~nine months ended ~~June~~September 30, 2022 driven by ~~the increase~~favorable changes in operating working capital and increased net ~~income, partially offset by a small unfavorable change in working capital.~~income.

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CONSOLIDATED RESULTS OF OPERATIONS

The following table summarizes our results of operations (dollars in thousands, except per share data):


		Three Months Ended June 30,								Six Months Ended June 30,									Three Months Ended September 30,								Nine Months Ended September 30,
		2022			2021			% change		2022			2021			% change			2022			2021			% change		2022			2021			% change
Revenues:	Revenues:																	Revenues:
Transportation	Transportation	$	6,465,642		$	5,240,448		23.4	%	$	12,993,993		$	9,800,675		32.6	%	Transportation	$	5,724,364		$	5,999,901		(4.6)	%	$	18,718,357		$	15,800,576		18.5	%
Sourcing	Sourcing	332,833			292,278			13.9	%	620,435			535,920			15.8	%	Sourcing	291,012			263,794			10.3	%	911,447			799,714			14.0	%
Total revenues	Total revenues	6,798,475			5,532,726			22.9	%	13,614,428			10,336,595			31.7	%	Total revenues	6,015,376			6,263,695			(4.0)	%	19,629,804			16,600,290			18.2	%
Costs and expenses:	Costs and expenses:																	Costs and expenses:
Purchased transportation and related services	Purchased transportation and related services	5,466,874			4,519,305			21.0	%	11,117,098			8,400,590			32.3	%	Purchased transportation and related services	4,862,541			5,180,390			(6.1)	%	15,979,639			13,580,980			17.7	%
Purchased products sourced for resale	Purchased products sourced for resale	299,988			264,245			13.5	%	559,521			484,449			15.5	%	Purchased products sourced for resale	265,641			239,113			11.1	%	825,162			723,562			14.0	%
Personnel expenses	Personnel expenses	444,764			362,901			22.6	%	858,125			723,736			18.6	%	Personnel expenses	437,545			399,880			9.4	%	1,295,670			1,123,616			15.3	%
Other selling, general, and administrative expenses	Other selling, general, and administrative expenses	117,184			125,671			(6.8)	%	264,545			243,887			8.5	%	Other selling, general, and administrative expenses	162,040			133,543			21.3	%	426,585			377,430			13.0	%
Total costs and expenses	Total costs and expenses	6,328,810			5,272,122			20.0	%	12,799,289			9,852,662			29.9	%	Total costs and expenses	5,727,767			5,952,926			(3.8)	%	18,527,056			15,805,588			17.2	%
Income from operations	Income from operations	469,665			260,604			80.2	%	815,139			483,933			68.4	%	Income from operations	287,609			310,769			(7.5)	%	1,102,748			794,702			38.8	%
Interest and other income/expense, net	Interest and other income/expense, net	(27,395)			(13,497)			103.0	%	(41,569)			(24,757)			67.9	%	Interest and other income/expense, net	(15,972)			(16,662)			(4.1)	%	(57,541)			(41,419)			38.9	%
Income before provision for income taxes	Income before provision for income taxes	442,270			247,107			79.0	%	773,570			459,176			68.5	%	Income before provision for income taxes	271,637			294,107			(7.6)	%	1,045,207			753,283			38.8	%
Provision for income taxes	Provision for income taxes	94,085			53,318			76.5	%	155,037			92,082			68.4	%	Provision for income taxes	45,839			47,054			(2.6)	%	200,876			139,136			44.4	%
Net income	Net income	$	348,185		$	193,789		79.7	%	$	618,533		$	367,094		68.5	%	Net income	$	225,798		$	247,053		(8.6)	%	$	844,331		$	614,147		37.5	%

Diluted net income per share	Diluted net income per share	$	2.67		$	1.44		85.4	%	$	4.71		$	2.71		73.8	%	Diluted net income per share	$	1.78		$	1.85		(3.8)	%	$	6.50		$	4.56		42.5	%

Average headcount		17,893			15,405			16.2	%	17,554			15,233			15.2	%
Average employee headcount																		Average employee headcount	18,045			15,968			13.0	%	17,652			15,482			14.0	%

Adjusted gross profit margin percentage(1)	Adjusted gross profit margin percentage(1)																	Adjusted gross profit margin percentage(1)
Transportation	Transportation	15.4		%	13.8		%	160 bps		14.4		%	14.3		%	10 bps		Transportation	15.1		%	13.7		%	140 bps		14.6		%	14.0		%	60 bps
Sourcing	Sourcing	9.9		%	9.6		%	30 bps		9.8		%	9.6		%	20 bps		Sourcing	8.7		%	9.4		%	(70 bps)		9.5		%	9.5		%	0 bps
Total adjusted gross profit margin	Total adjusted gross profit margin	15.2		%	13.5		%	170 bps		14.2		%	14.0		%	20 bps		Total adjusted gross profit margin	14.7		%	13.5		%	120 bps		14.4		%	13.8		%	60 bps

________________________________

(1) Adjusted gross profit margin is a non-GAAP financial measure explained above.

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A reconciliation of our reportable segments to our consolidated results can be found in Note 9, Segment Reporting, in Part I, Financial Information of this Quarterly Report on Form 10-Q.

Consolidated Results of Operations—Three Months Ended ~~June~~September 30, 2022 Compared to the Three Months Ended ~~June~~September 30, 2021

Total revenues and direct costs. Total transportation revenues and ~~purchased~~direct costs decreased primarily due to significant declines in our global forwarding business driven by the slowing global demand discussed in the market trends and business trends sections above compared to the historically elevated levels achieved in the prior year. The decrease was partially offset by an increase in total transportation revenues and ~~related~~direct costs in LTL and truckload services ~~increased primarily~~ due to higher pricing ~~across most of our services, most notably in ocean, truckload,~~ and ~~LTL services, in addition to increased volumes in truckload and ocean services. While prices remain elevated~~purchased transportation costs compared to ~~pre-pandemic levels~~the prior year. While LTL and truckload rates remain elevated compared to the prior year, ~~due to driver availability challenges and supply chain disruptions, including port congestion and equipment shortages, prices~~they began to decline within the ~~second~~third quarter of 2022. The decline in ~~pricing~~LTL and truckload rates within the ~~second~~third quarter of 2022 is the result of softening market conditions as declining demand ~~has~~ better ~~aligned~~aligns with capacity available in the ~~market as shippers work through elevated inventory levels, and cautiously approach macroeconomic uncertainty and moderating consumer demand.~~market. Our sourcing total revenue and ~~purchased products sourced for resale~~direct costs increased ~~as a result of~~driven by higher ~~cost~~pricing and ~~pricing~~cost per case and increased case volume across ~~all~~the retail and foodservice customer verticals.

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Gross profits and adjusted gross profits. Our transportation adjusted gross profits increased due to elevated pricing in truckload and LTL services compared to the prior year, ~~across most of our services, most notably in truckload, ocean, and LTL services,~~ resulting in higher adjusted gross profits per transaction. These increases were partially offset by decreased adjusted gross profits in our global forwarding business driven by the slowing global demand discussed in the markets and business trends section above. Our surface transportation adjusted gross profit per transaction increased ~~significantly~~ driven by the declining cost of purchased transportation within the ~~second~~third quarter of 2022 relative to our contractual rates negotiated in prior quarters which ~~significantly~~ reduced the percentage of shipments with negative adjusted gross profit margins. Sourcing adjusted gross profits increased driven by ~~an increase in case volume and~~ higher adjusted gross profits per case, ~~across all customer verticals.~~which is primarily related to integrated supply chain and technology services.

Operating expenses. Personnel expenses increased primarily due to an increase in salaries ~~and incentive compensation~~ driven by an increase in average employee headcount. SG&A expenses ~~decreased~~increased due to ~~a $23.5 million gain on the sale-leaseback of a facility~~increases in ~~Kansas City~~legal settlements, purchased and ~~lower credit losses.~~contracted services and travel expenses. This was partially offset by ~~higher purchased and contracted services and increased travel expenses.~~lower credit losses.

Interest and other income/~~expense.~~expense, net. Interest and other income/expense, net primarily consisted of interest expense of ~~$17.0~~$20.8 million ~~in the second quarter of 2022~~ and was partially offset by a ~~$10.3~~$5.2 million ~~unfavorable~~favorable impact of foreign currency revaluation and realized foreign currency gains and losses primarily due to a strengthening of the U.S. Dollar versus the ~~Euro and~~ Yuan. Interest expense increased $7.7 million during the third quarter of 2022, driven by a higher average debt balance ~~in the second quarter of 2022~~ compared to the ~~second quarter of 2021.~~prior year. The ~~second~~third quarter of 2021 included a ~~$1.9~~$3.8 million unfavorable impact of foreign currency revaluation and realized foreign currency gains and losses.

Provision for income taxes. Our effective income tax rate was ~~21.3~~16.9 percent for the ~~second~~third quarter of 2022 compared to ~~21.6~~16.0 percent for the ~~second~~third quarter of 2021. The effective income tax rate for the ~~second~~third quarter of 2022 was ~~higher~~lower than the statutory federal income tax rate primarily due to U.S. tax credits and incentives, which decreased the effective income tax rate by 6.2 percentage points. This impact was partially offset by a higher tax rate on foreign earnings and state income taxes, net of federal benefit, which increased the effective income tax rate by ~~2.0~~2.8 percentage ~~points. This impact was partially offset by the tax impact of foreign tax credits, which reduced the effective tax rate by 1.4~~points and 2.4 percentage ~~points.~~points, respectively. The effective income tax rate for the ~~second~~third quarter of 2021 was ~~higher~~lower than the statutory federal income tax rate primarily due to ~~state income taxes, net of federal benefit, and~~a lower tax rate on foreign ~~income taxes~~earnings, which ~~both increased~~decreased our effective tax rate by ~~2.0~~4.2 percentage ~~points. These impacts on~~points in the ~~effective income tax rate were partially offset by the tax impact~~third quarter of ~~foreign tax credits, which reduced the effective tax rate by 1.2 percentage points.~~2021.

Consolidated Results of Operations—~~Six~~Nine Months Ended ~~June~~September 30, 2022 Compared to the ~~Six~~Nine Months Ended ~~June~~September 30, 2021

Total revenues and direct costs. Total transportation revenues and ~~purchased transportation and related services~~direct costs increased driven by higher pricing in nearly all of our service lines, most notably in ocean and truckload services. Volumes also increased in ocean and truckload services. Purchased transportation and related service costs remain elevated compared to ~~pre-pandemic levels and compared to~~ the prior year ~~as supply chain disruptions continue~~but did start to ~~impact both~~decline during the surface transportation and global forwarding markets. While supply chain disruptions continue to drive higher costs and pricing in the period we did see evidence that the market may be softening as demand has better aligned with available capacity within the secondthird quarter of ~~2022.~~2022, most notably in ocean and air freight services. Our sourcing total revenue and ~~purchased products sourced for resale~~direct costs increased ~~as a result of~~driven by higher ~~cost~~pricing and ~~pricing~~cost per case ~~and increased case volume~~ across all customer verticals.

Gross profits and adjusted gross profits. Our transportation adjusted gross profits increased due to increased pricing compared to the prior year across most of our services, most notably in truckload, ~~ocean~~LTL, and ~~LTL~~ocean services resulting in higher adjusted gross profits per transaction. Our surface transportation adjusted gross profit per transaction also benefited from the declining cost of purchased transportation ~~within the second quarter of 2022~~ relative to our contractual rates negotiated in prior quarters which significantly reduced the percentage of shipments with negative adjusted gross profit margins. Sourcing adjusted gross profits increased driven by an increase in case volume across the retail and foodservice verticals and higher adjusted gross profits per case across all customer verticals.

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Operating expenses. Personnel expenses increased primarily due to an increase in salaries and incentive compensation driven by an increase in average employee headcount. SG&A expenses increased primarily due to increases in purchased and contracted services, legal settlements, travel, and warehouse expenses, partially offset by a $23.5 million gain on the sale-leaseback of a facility in Kansas City.

Interest and other income/~~expense.~~expense, net. Interest and other income/expense, net primarily consisted of interest expense of ~~$31.5~~$52.3 million and ~~an $11.8~~a $6.6 million unfavorable impact of foreign currency revaluation and realized foreign currency gains and losses in the ~~six~~nine months ended ~~June~~September 30, 2022 primarily due to ~~a strengthening~~the impact of the strengthening U.S. Dollar versus the Euro and Australian Dollar, partially offset by a favorable impact of the strengthening U.S. Dollar versus the Yuan. Interest expense increased $14.3 million driven by a higher average debt balance compared to the ~~six months ended June 30, 2021.~~prior year. The ~~six months ended June 30, 2021~~prior year included ~~a $4.8~~an $8.6 million unfavorable impact of foreign currency revaluation and realized foreign currency gains and losses that was partially offset by a $2.9 million local government subsidy in Asia for achieving specified performance criteria that was almost entirely offset by a reduction in foreign tax credits within the provision for income taxes.

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Provision for income taxes. Our effective income tax rate was ~~20.0~~19.2 percent for the ~~six~~nine months ended ~~June~~September 30, 2022 and ~~20.1~~18.5 percent for the ~~six~~nine months ended ~~June~~September 30, 2021. The effective income tax rate for the ~~six~~nine months ended ~~June~~September 30, 2022 was lower than the statutory federal income tax rate primarily due to U.S. tax credits and incentives, the tax impact of share-based payment awards, and the tax impact of foreign tax credits, ~~U.S. tax credits and incentives, and the tax impact of share-based payment awards,~~ which reduced the effective tax rate by 2.3 percentage points, 1.1 percentage points, ~~1.0 percentage points,~~ and ~~0.9~~0.8 percentage points, respectively. These impacts were partially offset by state income tax expense, net of federal benefit, which increased the effective income tax rate by ~~1.7~~1.9 percentage points. The effective income tax rate for the ~~six~~nine months ended ~~June~~September 30, 2021 was lower than the statutory federal income tax rate primarily due to ~~the tax impact of share-based payment awards,~~ U.S. tax credits and incentives and ~~the~~a lower tax ~~impact of~~rate on foreign ~~tax credits,~~earnings, which reduced the effective tax rate by ~~1.5 percentage points, 0.9~~1.7 percentage points and ~~0.5~~1.5 percentage points, respectively. These impacts were partially offset by state income tax expense, net of federal benefit, which increased the effective income tax rate by ~~2.1~~1.5 percentage points.

NAST Segment Results of Operations


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in thousands)	(dollars in thousands)	2022		2021		% change		2022		2021		% change		(dollars in thousands)	2022		2021		% change		2022		2021		% change
Total revenues	Total revenues	$	4,147,046	$	3,585,481	15.7	%	$	8,261,935	$	6,796,904	21.6	%	Total revenues	$	4,002,461	$	3,814,988	4.9	%	$	12,264,396	$	10,611,892	15.6	%
Costs and expenses:	Costs and expenses:													Costs and expenses:
Purchased transportation and related services	Purchased transportation and related services	3,522,495		3,148,885		11.9	%	7,131,284		5,939,200		20.1	%	Purchased transportation and related services	3,438,674		3,354,839		2.5	%	10,569,958		9,294,039		13.7	%
Personnel expenses	Personnel expenses	225,210		185,253		21.6	%	426,012		369,182		15.4	%	Personnel expenses	218,508		202,304		8.0	%	644,520		571,486		12.8	%
Other selling, general, and administrative expenses	Other selling, general, and administrative expenses	122,842		100,251		22.5	%	245,786		200,646		22.5	%	Other selling, general, and administrative expenses	133,380		108,810		22.6	%	379,166		309,456		22.5	%
Total costs and expenses	Total costs and expenses	3,870,547		3,434,389		12.7	%	7,803,082		6,509,028		19.9	%	Total costs and expenses	3,790,562		3,665,953		3.4	%	11,593,644		10,174,981		13.9	%
Income from operations	Income from operations	$	276,499	$	151,092	83.0	%	$	458,853	$	287,876	59.4	%	Income from operations	$	211,899	$	149,035	42.2	%	$	670,752	$	436,911	53.5	%

		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,						Nine Months Ended September 30,
		2022		2021		% change		2022		2021		% change			2022		2021		% change		2022		2021		% change
Average headcount		7,552		6,580		14.8	%	7,442		6,578		13.1	%
Average employee headcount														Average employee headcount	7,493		6,764		10.8	%	7,420		6,650		11.6	%
Service line volume statistics	Service line volume statistics													Service line volume statistics
Truckload	Truckload					2.0	%					3.0	%	Truckload					0.5	%					2.0	%
LTL	LTL					(5.0)	%					(3.0)	%	LTL					(1.5)	%					(2.5)	%

Adjusted gross profits(1)	Adjusted gross profits(1)													Adjusted gross profits(1)
Truckload	Truckload	$	432,048	$	286,574	50.8	%	$	766,958	$	566,878	35.3	%	Truckload	$	374,095	$	309,787	20.8	%	$	1,141,053	$	876,665	30.2	%
LTL	LTL	166,868		128,155		30.2	%	317,610		248,272		27.9	%	LTL	160,963		131,166		22.7	%	478,573		379,438		26.1	%
Other	Other	25,635		21,867		17.2	%	46,083		42,554		8.3	%	Other	28,729		19,196		49.7	%	74,812		61,750		21.2	%
Total adjusted gross profits	Total adjusted gross profits	$	624,551	$	436,596	43.1	%	$	1,130,651	$	857,704	31.8	%	Total adjusted gross profits	$	563,787	$	460,149	22.5	%	$	1,694,438	$	1,317,853	28.6	%

________________________________

(1) Adjusted gross profit margin is a non-GAAP financial measure explained above.

Table of Contents

Three Months Ended ~~June~~September 30, 2022 ~~compared~~Compared to the Three Months Ended ~~June~~September 30, 2021

Total revenues and direct costs. NAST total revenues and ~~purchased transportation and related services~~direct costs increased primarily due to higher pricing ~~in truckload~~ and ~~LTL services, in addition to higher truckload volumes. These increases were partially offset by a decline~~purchased transportation costs in LTL ~~volumes.~~and truckload services. While prices remain elevated compared to ~~pre-pandemic levels and compared to~~ the prior year, ~~due to driver availability challenges and supply chain disruptions, including port congestion and equipment shortages,~~ they began to decline within the ~~second~~third quarter of 2022. The decline in ~~pricing~~freight rates within the ~~second~~third quarter of 2022 is the result of softening market conditions as declining demand ~~has~~ better ~~aligned~~aligns with capacity available in the market.

~~Table of Contents~~

Gross profits and adjusted gross profits. NAST adjusted gross profits increased due to ~~increased~~elevated pricing in truckload and LTL services compared to the prior year, ~~in truckload and LTL services~~ resulting in higher adjusted gross profits per ~~transaction in addition to higher truckload volumes. These increases were partially offset by a decline in LTL volumes.~~transaction. Our NAST adjusted gross profit per transaction increased ~~significantly~~ driven by the declining ~~costs~~cost of purchased transportation within the ~~second~~third quarter of 2022 relative to our contractual rates negotiated in prior quarters which ~~significantly~~ reduced the percentage of shipments with negative adjusted gross profit margins. Our average truckload linehaul rate per mile charged to our customers, which excludes fuel surcharges, ~~increased~~decreased approximately ~~1.5~~13.0 percent in the ~~second~~third quarter of 2022 compared to the ~~second~~third quarter of 2021. Our truckload ~~transportation costs,~~linehaul cost per mile, excluding fuel surcharges, decreased approximately ~~5.0~~17.0 percent.

NAST other adjusted gross profits increased primarily driven by an increase in ~~warehousing services and an increase in~~ intermodal adjusted gross ~~profits.~~profits and increased warehousing services.

Operating expenses. NAST personnel expenses increased primarily due to an increase in salaries ~~and incentive compensation~~ driven by an increase in average employee headcount. NAST SG&A expenses increased primarily due to increased legal settlements, increased investments in technology, ~~increased expenditures for purchased services including temporary labor,~~ and increased warehouse ~~expense.~~expenses. The operating expenses of NAST and all other segments include allocated corporate expenses. Allocated personnel expenses consist primarily of stock-based compensation allocated based upon segment participation levels in our equity plans. Remaining corporate allocations, including corporate functions and technology related expenses, are primarily included within each segment’s other SG&A and allocated based upon relevant segment operating metrics.

~~Six~~Nine Months Ended ~~June~~September 30, 2022 ~~compared~~Compared to the ~~Six~~Nine Months Ended ~~June~~September 30, 2021

Total revenues and direct costs. NAST total revenues and ~~purchased transportation and related services~~direct costs increased due to higher pricing in truckload and in LTL services, in addition to volume increases in truckload services. ~~Truckload pricing reached historic levels during the first quarter of 2022 due to tight carrier capacity caused by driver availability challenges~~Purchased transportation and ~~the supply chain disruptions facing the industry, however, prices started to decline within the second quarter of 2022. The~~related service costs ~~of purchased transportation also started to decline driven by moderating demand and capacity entering the market but~~ remain elevated compared to the prior ~~year.~~year but have started to decline as a result of softening market conditions as declining demand better aligns with capacity available in the market.

Gross profits and adjusted gross profits. NAST adjusted gross profits increased primarily due ~~primarily~~ to increased pricing in truckload and LTL services resulting in higher adjusted gross profits per transaction, in addition to an increase in ~~volume. The increased~~volume in truckload services. Our NAST adjusted gross profit per transaction ~~was~~benefited from the ~~result~~declining cost of ~~the softening market conditions resulting in moderating costs for~~ purchased transportation relative to our contractual rates negotiated in prior ~~quarters. This significant~~quarters, which significantly reduced the percentage of shipments with negative adjusted gross profit margins. Our average truckload linehaul rate per mile charged to our customers, which excludes fuel surcharges, increased approximately ~~10.5~~2.0 percent. Our truckload ~~transportation costs,~~linehaul cost per mile, excluding fuel surcharges, ~~increased~~decreased approximately ~~7.5~~1.5 percent.

NAST other adjusted gross profits increased driven by an increase in warehousing ~~services.~~services and an increase in intermodal adjusted gross profits.

Operating expenses. NAST personnel expense increased primarily due to an increase in salaries and incentive compensation driven by an increase in average employee headcount. NAST SG&A expenses increased due to increased investments in technology, increased legal settlements, increased expenditures for purchased and contracted services, including temporary labor, and increased warehouse ~~expense, and a non-recurring legal expense.~~expenses.

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Global Forwarding Segment Results of Operations


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in thousands)	(dollars in thousands)	2022		2021		% change		2022		2021		% change		(dollars in thousands)	2022		2021		% change		2022		2021		% change
Total revenues	Total revenues	$	2,093,190	$	1,450,794	44.3	%	$	4,287,587	$	2,606,833	64.5	%	Total revenues	$	1,511,115	$	1,978,901	(23.6)	%	$	5,798,702	$	4,585,734	26.5	%
Costs and expenses:	Costs and expenses:													Costs and expenses:
Purchased transportation and related services	Purchased transportation and related services	1,768,747		1,212,040		45.9	%	3,641,296		2,153,779		69.1	%	Purchased transportation and related services	1,262,682		1,668,003		(24.3)	%	4,903,978		3,821,782		28.3	%
Personnel expenses	Personnel expenses	106,096		82,936		27.9	%	207,372		163,945		26.5	%	Personnel expenses	106,608		96,298		10.7	%	313,980		260,243		20.6	%
Other selling, general, and administrative expenses	Other selling, general, and administrative expenses	50,790		47,606		6.7	%	103,724		90,308		14.9	%	Other selling, general, and administrative expenses	55,872		49,445		13.0	%	159,596		139,753		14.2	%
Total costs and expenses	Total costs and expenses	1,925,633		1,342,582		43.4	%	3,952,392		2,408,032		64.1	%	Total costs and expenses	1,425,162		1,813,746		(21.4)	%	5,377,554		4,221,778		27.4	%
Income from operations	Income from operations	$	167,557	$	108,212	54.8	%	$	335,195	$	198,801	68.6	%	Income from operations	$	85,953	$	165,155	(48.0)	%	$	421,148	$	363,956	15.7	%

		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,						Nine Months Ended September 30,
		2022		2021		% change		2022		2021		% change			2022		2021		% change		2022		2021		% change
Average headcount		5,759		4,909		17.3	%	5,690		4,832		17.8	%
Average employee headcount														Average employee headcount	5,861		5,167		13.4	%	5,735		4,951		15.8	%
Service line volume statistics	Service line volume statistics													Service line volume statistics
Ocean	Ocean					2.5	%					4.5	%	Ocean					(2.5)	%					2.5	%
Air	Air					(6.0)	%					1.5	%	Air					(16.5)	%					(5.0)	%
Customs	Customs					10.5	%					8.0	%	Customs					4.0	%					6.5	%

Adjusted gross profits(1)	Adjusted gross profits(1)													Adjusted gross profits(1)
Ocean	Ocean	$	228,093	$	150,916	51.1	%	$	449,494	$	286,312	57.0	%	Ocean	$	159,739	$	214,824	(25.6)	%	$	609,233	$	501,136	21.6	%
Air	Air	56,112		52,179		7.5	%	116,679		97,426		19.8	%	Air	47,058		59,621		(21.1)	%	163,737		157,047		4.3	%
Customs	Customs	27,820		25,512		9.0	%	55,315		49,735		11.2	%	Customs	27,881		25,468		9.5	%	83,196		75,203		10.6	%
Other	Other	12,418		10,147		22.4	%	24,803		19,581		26.7	%	Other	13,755		10,985		25.2	%	38,558		30,566		26.1	%
Total adjusted gross profits	Total adjusted gross profits	$	324,443	$	238,754	35.9	%	$	646,291	$	453,054	42.7	%	Total adjusted gross profits	$	248,433	$	310,898	(20.1)	%	$	894,724	$	763,952	17.1	%

________________________________

(1) Adjusted gross profit margin is a non-GAAP financial measure explained above.

Three Months Ended ~~June~~September 30, 2022 ~~compared~~Compared to the Three Months Ended ~~June~~September 30, 2021

Total revenues and direct costs. Global forwarding total revenues and ~~purchased~~direct costs decreased due to lower pricing and volumes in ocean and air freight services, reflecting the impact of slowing global demand discussed in the market and business trends sections above. The prior year was significantly impacted by port congestion in addition to equipment and labor shortages that resulted in pricing and costs reaching historically elevated levels. Decreased air freight volumes also reflected fewer ocean freight conversions than occurred in the prior year driven by shippers maintaining higher inventory levels, declining consumer demand, and improving ocean schedule reliability as port congestion improves in the current year.

Gross profits and adjusted gross profits. Ocean and air freight transportation ~~and related services~~adjusted gross profits decreased due to lower adjusted gross profits per transaction, in addition to a decrease in volume for both services. Customs adjusted gross profits increased driven by an increase in transaction volume.

Operating expenses. Personnel expenses increased primarily due to an increase in salaries driven by an increase in average employee headcount. SG&A expenses increased due to increased investments in technology.

Nine Months Ended September 30, 2022 Compared to the Nine Months Ended September 30, 2021

Total revenues and direct costs. Total revenues and direct costs increased driven by higher pricing and, ~~higher~~to a lesser extent, increased volumes in ~~our~~ ocean services. These increases were partially offset by lower pricing and volumes in air freight services. The cost of purchased transportation and pricing ~~continues to be~~has been elevated compared to pre-pandemic levels and compared to the prior year ~~driven by~~for much of 2022; however, the ~~continued supply chain disruptions impacting the global forwarding market. The~~ market did ~~begin to show signs of softening which resulted~~soften resulting in prices beginning to moderate within the second quarter of 2022, most notably on the Transpacific trade lane as we experienced a decline in Asia Pacific ocean volumes. Despite this decline, our total ocean volumes increased due to strong growth in other regions where we operate. Air freight total revenues and purchased transportation and related services decreased driven by conversions back to ocean freight and the impact of increased air freight capacity ondeclining purchased transportation costs and pricing in ~~certain trade lanes due to~~ the ~~increased frequency~~third quarter of ~~commercial flights which were significantly reduced at the onset~~2022.

Table of ~~the COVID-19 pandemic.~~Contents

Gross profits and adjusted gross profits. Ocean transportation adjusted gross profits increased due to higher adjusted gross profits per transaction and increased volumes. Air freight transportation adjusted gross profits increased due to higher ~~pricing resulting in increased~~ adjusted gross profits per transaction, in addition to an increase in total volumes. Air freight adjusted gross profits increased due to an increase in adjusted gross profits per transaction driven by the declining cost of purchased transportation, partially offset by a decrease in ~~volume.~~volumes. Customs adjusted gross profits increased ~~due to~~driven by an increase in transaction volume.

Operating expenses. Personnel expenses increased primarily due to an increase in salaries and incentive compensation driven by an increase in average ~~headcount. SG&A expenses increased due to increased investments in technology and travel expenses, partially offset by favorable credit losses.~~

~~Table of Contents~~

~~Six Months Ended June 30, 2022 compared to the Six Months Ended June 30, 2021~~

~~Total revenues and direct costs.~~ Total revenues and purchased transportation and related services increased driven by higher pricing and volumes in our ocean services and, to a lesser extent, higher pricing and volumes in our air freight services. The cost of purchased transportation and pricing continues to be elevated compared to pre-pandemic levels and compared to the prior year driven by the continued supply chain disruptions impacting the global forwarding market.

~~Gross profits and adjusted gross profits.~~ Ocean and air freight transportation adjusted gross profits increased driven by higher pricing resulting in increased adjusted gross profits per transaction, in addition to increased volumes. Customs adjusted gross profits increased driven by an increase in transaction volumes.

~~Operating expenses.~~ ~~Personnel expenses increased primarily due to an increase in salaries and incentive compensation driven by an increase in average~~employee headcount. SG&A expenses increased due to increased investments in technology, increased purchased services including temporary labor, and increased travel expenses. These increases were partially offset by favorable credit losses.

All Other and Corporate Segment Results of Operations

All Other and Corporate includes our Robinson Fresh and Managed Services segment, as well as Other Surface Transportation outside of North America and other miscellaneous revenues and unallocated corporate expenses.


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in thousands)	(dollars in thousands)	2022		2021		% change		2022		2021		% change		(dollars in thousands)	2022		2021		% change		2022		2021		% change
Total revenues	Total revenues	$	558,239	$	496,451	12.4	%	$	1,064,906	$	932,858	14.2	%	Total revenues	$	501,800	$	469,806	6.8	%	$	1,566,706	$	1,402,664	11.7	%
Income (loss) from operations	Income (loss) from operations	25,609		1,300		N/M		21,091		(2,744)		N/M		Income (loss) from operations	(10,243)		(3,421)		N/M		10,848		(6,165)		N/M

Adjusted gross profits(1)	Adjusted gross profits(1)													Adjusted gross profits(1)
Robinson Fresh	Robinson Fresh	34,981		29,940		16.8	%	65,486		54,888		19.3	%	Robinson Fresh	27,677		26,651		3.8	%	93,163		81,539		14.3	%
Managed Services	Managed Services	27,618		26,234		5.3	%	55,700		51,790		7.5	%	Managed Services	29,595		26,720		10.8	%	85,295		78,510		8.6	%
Other Surface Transportation	Other Surface Transportation	20,020		17,652		13.4	%	39,681		34,120		16.3	%	Other Surface Transportation	17,702		19,774		(10.5)	%	57,383		53,894		6.5	%
Total adjusted gross profits	Total adjusted gross profits	$	82,619	$	73,826	11.9	%	$	160,867	$	140,798	14.3	%	Total adjusted gross profits	$	74,974	$	73,145	2.5	%	$	235,841	$	213,943	10.2	%

________________________________

(1) Adjusted gross profit margin is a non-GAAP financial measure explained above.

Three Months Ended ~~June~~September 30, 2022 ~~compared~~Compared to the Three Months Ended ~~June~~September 30, 2021

Total revenues and direct costs. ~~Robinson Fresh total~~Total revenues and direct costs increased ~~due to~~driven by higher pricing and cost per case and increased case volume across the retail and foodservice customer verticals within our Robinson Fresh business.

Gross profits and adjusted gross profits. Robinson Fresh adjusted gross profits increased driven by higher adjusted gross profits per case, which is primarily related to integrated supply chain and technology services. Managed Services adjusted gross profits increased due to growth in adjusted gross profit per transaction. Other Surface Transportation adjusted gross profits decreased driven by a decrease in Europe truckload adjusted gross profits.

Nine Months Ended September 30, 2022 Compared to the Nine Months Ended September 30, 2021

Total revenues and direct costs. Total revenues and direct costs increased driven by higher pricing and cost per case across all customer verticals. In addition, total revenues and direct costs in Other Surface Transportation increased due to higher truckload pricing and purchased transportation costs in Europe, partially offset by a decline in Europe truckload ~~pricing.~~volumes.

Gross profits and adjusted gross profits. Robinson Fresh adjusted gross profits increased driven by an increase in case volume across the retail and foodservice verticals and higher adjusted gross profits per case across all customer verticals. Managed Services adjusted gross profits increased due to an increase in freight under management, which was driven by growth in business with both new and existing customers. Other Surface Transportation adjusted gross profits increased due to ~~increased Europe truckload adjusted gross profits per transaction.~~

~~Six Months Ended June 30, 2022 compared to the Six Months Ended June 30, 2021~~

~~Total revenues and direct costs.~~ Robinson Fresh total revenues increased driven by higher pricing per case and increased case volume across all customer verticals. In addition, total revenues in Other Surface Transportation increased due to higher to higher Europe truckload pricing and an increase in Europe truckload volumes.

~~Gross profits and adjusted gross profits.~~ ~~Robinson Fresh adjusted gross profits increased driven by an increase in case volume and~~ higher adjusted gross profits per ~~case across all customer verticals. Managed Services adjusted gross profits increased due to an increase in freight under management, which was driven~~transaction, partially offset by growth in business with both new and existing customers. Other Surface Transportation adjusted gross profits increased due to increased Europe truckload adjusted gross profits per transaction and an increasea decline in Europe truckload volumes.

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LIQUIDITY AND CAPITAL RESOURCES

We have historically generated substantial cash from operations, which has enabled us to fund our organic growth while paying cash dividends and repurchasing stock. In addition, we maintain the following debt facilities as described in Note 4, Financing Arrangements (in thousands):


Description	Description	Carrying Value as of June 30, 2022		Borrowing Capacity		Maturity	Description	Carrying Value as of September 30, 2022		Borrowing Capacity		Maturity
Revolving credit facility	Revolving credit facility	$	174,000	$	1,000,000	October 2023	Revolving credit facility	$	104,000	$	1,000,000	October 2023
364-day revolving credit facility	364-day revolving credit facility	500,000		500,000		May 2023	364-day revolving credit facility	500,000		500,000		May 2023
Senior Notes, Series A	Senior Notes, Series A	175,000		175,000		August 2023	Senior Notes, Series A	175,000		175,000		August 2023
Senior Notes, Series B	Senior Notes, Series B	150,000		150,000		August 2028	Senior Notes, Series B	150,000		150,000		August 2028
Senior Notes, Series C	Senior Notes, Series C	175,000		175,000		August 2033	Senior Notes, Series C	175,000		175,000		August 2033

Receivables securitization facility (1)		499,448		500,000		November 2023
Receivables Securitization Facility (1)							Receivables Securitization Facility (1)	499,552		500,000		November 2023
Senior Notes (1)	Senior Notes (1)	594,607		600,000		April 2028	Senior Notes (1)	594,828		600,000		April 2028
Total debt	Total debt	$	2,268,055	$	3,100,000		Total debt	$	2,198,380	$	3,100,000

(1) Net of unamortized discounts and issuance costs.

We expect to use our current debt facilities and potentially other indebtedness incurred in the future to assist us in continuing to fund working capital, capital expenditures, possible acquisitions, dividends, and share repurchases.

Cash and cash equivalents totaled ~~$238.9~~$187.5 million as of ~~June~~September 30, 2022 and $257.4 million as of December 31, 2021. Cash and cash equivalents held outside the United States totaled ~~$204.4~~$172.7 million as of ~~June~~September 30, 2022 and $217.1 million as of December 31, 2021.

We prioritize our investments to grow the business, as we require some working capital and a relatively small amount of capital expenditures to grow. We are continually looking for acquisitions, but those acquisitions must fit our culture and enhance our growth opportunities.

The following table summarizes our major sources and uses of cash and cash equivalents (dollars in thousands):


		Six Months Ended June 30,							Nine Months Ended September 30,
		2022		2021		% change			2022		2021		% change
Sources (uses) of cash:	Sources (uses) of cash:							Sources (uses) of cash:
Cash provided by operating activities	Cash provided by operating activities	$	251,329	$	92,598	171.4	%	Cash provided by operating activities	$	876,789	$	19,100	N/M

Capital expenditures	Capital expenditures	(69,403)		(29,837)				Capital expenditures	(100,654)		(52,565)
Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	—		(14,749)				Acquisitions, net of cash acquired	—		(14,749)
Other investing activities		63,208		—
Sale of property and equipment								Sale of property and equipment	63,208		—
Cash used for investing activities	Cash used for investing activities	(6,195)		(44,586)		(86.1)	%	Cash used for investing activities	(37,446)		(67,314)		(44.4)	%

Repurchase of common stock	Repurchase of common stock	(490,699)		(262,904)				Repurchase of common stock	(1,023,578)		(428,801)
Cash dividends	Cash dividends	(145,268)		(139,756)				Cash dividends	(216,258)		(208,926)
Net borrowings on debt	Net borrowings on debt	349,000		270,962				Net borrowings on debt	279,000		629,701
Other financing activities	Other financing activities	29,790		13,591				Other financing activities	66,818		17,937
Cash used for financing activities		(257,177)		(118,107)		117.7	%
Cash (used for) provided by financing activities								Cash (used for) provided by financing activities	(894,018)		9,911		N/M
Effect of exchange rates on cash and cash equivalents	Effect of exchange rates on cash and cash equivalents	(6,445)		(898)				Effect of exchange rates on cash and cash equivalents	(15,206)		(2,844)
Net change in cash and cash equivalents	Net change in cash and cash equivalents	$	(18,488)	$	(70,993)			Net change in cash and cash equivalents	$	(69,881)	$	(41,147)

Cash flow from operating activities. Cash provided by operating activities improved in the ~~six~~nine months ended ~~June~~September 30, 2022 compared to the ~~six~~nine months ended ~~June~~September 30, 2021 due to favorable changes in operating working capital due to volatility in freight costs and prices and increased net ~~income, partially offset by a small unfavorable change in working capital.~~income. We continue to closely monitor credit and collections activities and the quality of our accounts receivable balance to minimize risk as well as working with our customers to facilitate the movement of goods across their supply chains while also ensuring timely payment.

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Cash used for investing activities. Capital expenditures consisted primarily of investments in software, which are intended to ~~increase employee productivity, automate interactions with~~design and deliver scalable solutions by transforming our ~~customers~~processes, accelerate the pace of development and ~~contracted carriers, and~~prioritizing data integrity, improve our ~~internal workflows~~customer and carrier experience, and increase efficiency to help expand our adjusted operating margins and grow the business.

During the second quarter of 2022, we sold an office building in Kansas City, Missouri, for a sales price of $55 million and recognized a gain of $23.5 million on the sale of the building in the ~~three~~nine months ended ~~June~~September 30, 2022. We simultaneously entered into an agreement to lease the office building for 10 years.

Cash used for financing activities. Net borrowings on debt in the ~~six~~nine months ended ~~June~~September 30, 2022 and ~~June~~September 30, 2021 were to fund working capital needs and share repurchases. The increase in cash used for share repurchases was due to an increase in the number of shares repurchased and a higher average price per share during the ~~six~~nine months ended ~~June~~September 30, 2022. The number of shares we repurchase, if any, during future periods will vary based on our cash position, other potential uses of our cash, and market conditions. Over the long term, we remain committed to our quarterly dividend and share repurchases to enhance shareholder value. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. We may seek to retire or purchase our outstanding Senior Notes through open market cash purchases, privately negotiated transactions or otherwise.

We believe that, assuming no change in our current business plan, our available cash, together with expected future cash generated from operations, the amount available under our credit facilities, and credit available in the market, will be sufficient to satisfy our anticipated needs for working capital, capital expenditures, and cash dividends for at least the next 12 months and the foreseeable future. We also believe we could obtain funds under lines of credit or other forms of indebtedness on short notice, if needed.

As of ~~June~~September 30, 2022, we were in compliance with all of the covenants under the Credit Agreement, 364-day Credit Agreement, Note Purchase Agreement, Senior Notes, and Receivables ~~Securitization.~~Securitization Facility.

Recently Issued Accounting Pronouncements

Refer to Note 1, Basis of Presentation, contained in this Quarterly Report and in the company's 2021 Annual Report on Form 10-K for a discussion of recently issued accounting pronouncements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Refer to the company's 2021 Annual Report on Form 10-K for a complete discussion regarding our critical accounting policies and estimates. As of ~~June~~September 30, 2022, there were no material changes to our critical accounting policies and estimates.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Refer to the company’s 2021 Annual Report on Form 10-K for a discussion on the company’s market risk. As of ~~June~~September 30, 2022, there were no material changes in market risk from those disclosed in the company’s 2021 Annual Report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”) that are designed to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms; and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding disclosure.

Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of ~~June~~September 30, 2022. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of ~~June~~September 30, 2022.

(b) Changes in internal controls over financial reporting.

There were no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the three months ended ~~June~~September 30, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II-OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not subject to any pending or threatened litigation other than routine litigation arising in the ordinary course of our business ~~operations.~~operations, including certain contingent auto liability cases. For some legal proceedings, we have accrued an amount that reflects the aggregate liability deemed probable and estimable, but this amount is not material to our consolidated financial position, results of operations, or cash flows. Because of the preliminary nature of many of these proceedings, the difficulty in ascertaining the applicable facts relating to many of these proceedings, the inconsistent treatment of claims made in many of these proceedings, and the difficulty of predicting the settlement value of many of these proceedings, we are often unable to estimate an amount or range of any reasonably possible additional losses. However, based upon our historical experience, the resolution of these proceedings is not expected to have a material effect on our consolidated financial position, results of operations, or cash flows.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors disclosed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, which could materially affect our business, financial condition, or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results. As of ~~June~~September 30, 2022, there were no material changes to the risk factors set forth in the Company’s 2021 Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information about company purchases of common stock during the quarter ended ~~June~~September 30, 2022:
Total Number
of Shares
(or Units)
Purchased (1)
Average Price
Paid Per
Share
(or Unit)
Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs (2)
Maximum Number of
Shares (or Units)
That May Yet Be
Purchased Under the
Plans or Programs (2)
April 1, 2022 - April 30, 2022 928,786 $ 102.78 920,000 19,123,945
May 1, 2022 - May 31, 2022 1,074,372 106.47 1,015,000 18,108,945
June 1, 2022 - June 30, 2022 1,278,544 103.60 1,277,624 16,831,321
Second Quarter 2022 3,281,702 $ 104.31 3,212,624 16,831,321


	Total Number of Shares (or Units) Purchased (1)	Average Price Paid Per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Number of Shares (or Units) That May Yet Be Purchased Under the Plans or Programs (2)
July 1, 2022 - July 31, 2022	1,279,341	$	100.21	1,266,600	15,564,721
August 1, 2022 - August 31, 2022	1,638,304	115.16		1,635,790	13,928,931
September 1, 2022 - September 30, 2022	2,185,761	105.27		2,174,821	11,754,110
Third Quarter 2022	5,103,406	$	107.18	5,077,211	11,754,110

(1) The total number of shares purchased based on trade date includes: (i) ~~3,212,624~~5,077,211 shares of common stock purchased under the authorization described below; and (ii) ~~69,078~~26,195 shares of common stock surrendered to satisfy minimum statutory tax obligations under our stock incentive plans.

(2) In December 2021, the Board of Directors increased the number of shares authorized for repurchase by 20,000,000 shares. As of ~~June~~September 30, 2022, there were ~~16,831,321~~11,754,110 shares remaining for future repurchases. Repurchases can be made in the open market or in privately negotiated transactions, including Rule 10b5-1 plans and accelerated repurchase programs.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

On July 27, 2022, the Talent and Compensation Committee (the “Committee”) of our Board of Directors approved the C.H. Robinson Executive Separation and Change in Control Plan (the “Executive Severance Plan”), to be effective as of July 27, 2022. The Executive Severance Plan is intended to provide severance benefits to our executives in the event of a qualifying involuntary termination of their employment under certain circumstances, including such a termination involving a change in control of the company.

None.

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Certain of our executives, including all of our executive officers, are eligible to participate in the Executive Severance Plan. Executives who are parties to individual agreements providing for severance benefits are not eligible to participate in or receive benefits under the Executive Severance Plan. However, Messrs. Rajan and Zechmeister have agreed to waive the severance benefits provided under their employment agreements in order to be eligible for benefits under the Executive Severance Plan.

Under the Executive Severance Plan, following a termination by the company of an executive’s employment related to a reduction in staff, business reorganization, position elimination, closing of a business unit and other similar events, unless the executive’s employment is terminated for misconduct, failure to perform executive’s duties, actions which may harm the company, or any of the other reasons specified in the Executive Severance Plan (“cause”), an executive will be eligible to receive continuing base salary for 24 months (for the CEO), 18 months (for executive officers and presidents) or 12 months (for certain other vice presidents). A terminated employee will also be eligible to receive a lump-sum amount of the executive’s monthly COBRA premium payment multiplied by the same number of months as the continued base salary.

The Executive Severance Plan also provides that if an executive is terminated by the company for cause or by the executive for “good reason” (as defined in tour equity incentive plan) within 24 months after a “change in control” (as defined in our equity plan), the executive will be eligible to receive a lump sum payment equal to 2.5 (for the CEO), 2.0 (for executive officers and presidents) or 1.0 (for certain other vice presidents) times the executive’s (i) annual salary, (ii) annual target bonus, and (iii) annual cost of COBRA premiums. In addition, in connection with a termination following a change in control, all of an eligible executive’s outstanding equity awards will be fully vested (with performance awards vesting at the greater of actual or target performance levels). However, if the applicable equity incentive plan or the eligible executive’s outstanding equity award agreements provide more favorable terms than those provided by the Executive Severance Plan, the more favorable terms will apply. In addition, the Executive Severance Plan adopts a “net best benefit” approach with respect to addressing any potential parachute payments subject to Section 280G of the Internal Revenue Code.

To receive benefits under the Executive Severance Plan, an executive must sign and not revoke a separation agreement and general release of claims in the form we provide, including a non-disparagement agreement, comply with all other restrictive covenants, and the executive must work through the scheduled termination date. The Committee may amend the Executive Severance Plan from time to time to provide for different severance benefits and/or severance benefit terms and conditions, or to eliminate severance benefits entirely, for all or a portion of our executives.

~~The purpose of adopting the Executive Severance Plan is to provide for market competitive severance benefits for executives to aid in the attraction and retention of executive talent.~~

~~The Executive Severance Plan is attached as Exhibit 10.3 to this Quarterly Report on Form 10-Q.~~

ITEM 6. EXHIBITS

Exhibits filed with, or incorporated by reference into, this Quarterly Report:




10.1			Second Amendment to the Receivables Purchase Agreement, dated July 7, 2022 by and among C.H. Robinson Worldwide, Inc. ~~2022 Equity Incentive Plan, effective May 5, 2022~~, C.H. Robinson Receivables, LLC, and the various conduit purchasers, committed purchasers and purchaser agents, and administrative agent (incorporated by reference to ~~Appendix A to~~ the Company’s ~~definitive proxy statement~~Current Report on ~~Schedule 14A~~Form 8-K filed on ~~March 22,~~July 12, 2022).

10.2			~~Credit~~First Amendment to the Receivables Sale Agreement, ~~Dated as of May 6,~~dated July 7, 2022 ~~Among~~by and among C.H. Robinson Worldwide, Inc., C.H. Robinson Receivables, LLC, and the ~~Lenders, and U.S. Bank National Association, as Administrative Agent~~originators party thereto (incorporated by reference to the Company’s Current ~~Form~~Report on Form 8-K filed on ~~May 11,~~July 12, 2022)

10.3*			~~C.H. Robinson Executive Separation and Change in Control Pla~~n

31.1			Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2			Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1			Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2			Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101			Financial statements from the Quarterly Report on Form 10-Q of the company for the period ended ~~June~~September 30, 2022 formatted in Inline XBRL (embedded within the Inline XBRL document)

104			The cover page from the Quarterly Report on Form 10-Q of the company for the period ended ~~June~~September 30, 2022 formatted in Inline XBRL (embedded within the Inline XBRL document)

* Filed herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized on ~~July 29,~~November 4, 2022.


C.H. ROBINSON WORLDWIDE, INC.

By:						/s/ Robert C. Biesterfeld, Jr.
						Robert C. Biesterfeld, Jr.
						Chief Executive Officer


By:						/s/ Michael P. Zechmeister
						Michael P. Zechmeister
						Chief Financial Officer

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